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202-234-4433 Neal R. Gross & Co., Inc. Page 1 UNITED STATES DEPARTMENT OF AGRICULTURE BEFORE THE SECRETARY OF AGRICULTURE þ-------------------------» : IN RE: : : Docket Nos. ORANGES, GRAPEFRUIT, : AO-13-0163; TANGERINES, AND TANGELOS : FV-13-905-1; (CITRUS) GROWN IN FLORIDA : AMS-FV-12-0069 : : þ-------------------------¼ Wednesday, April 24, 2013 Florida Department of Agriculture and Consumer Services 500 3rd Street NW Winter Haven, Florida 33881 The above-captioned rulemaking hearing was held pursuant to notice at 9:00 a.m. BEFORE: JILL CLIFTON, Administrative Law Judge US Department of Agriculture South Building Room 1031 1400 Independence Avenue, SW Washington, DC 20250-9203 (202) 720-4443; (202) 720-9776

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Page 1: Page 1 UNITED STATES DEPARTMENT OF AGRICULTURE … · (CITRUS) GROWN IN FLORIDA : AMS-FV-12-0069:: þ-----¼ Wednesday, April 24, 2013 Florida Department of Agriculture and Consumer

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UNITED STATES DEPARTMENT OF AGRICULTURE BEFORE THE SECRETARY OF AGRICULTURE

þ-------------------------» :IN RE: : : Docket Nos.ORANGES, GRAPEFRUIT, : AO-13-0163;TANGERINES, AND TANGELOS : FV-13-905-1; (CITRUS) GROWN IN FLORIDA : AMS-FV-12-0069 : :þ-------------------------¼

Wednesday, April 24, 2013

Florida Department of Agriculture and Consumer Services 500 3rd Street NW Winter Haven, Florida 33881

The above-captioned rulemaking hearingwas held pursuant to notice at 9:00 a.m.

BEFORE:

JILL CLIFTON, Administrative Law Judge US Department of Agriculture South Building Room 1031 1400 Independence Avenue, SW Washington, DC 20250-9203

(202) 720-4443; (202) 720-9776

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PRESENT:

ON BEHALF OF THE USDA:

MR. BRIAN HILL

MR. MARC McFETRIDGE

MS. MELISSA SCHMAEDICK

MS. MICHELLE SHARROW

MS. JENNIE VARELA

MS. KATHLEEN BRIGHT

MR. COREY ELLIOTT

MR. CHRISTIAN NISSEN

MS. DOLORES LOWENSTINE

ON BEHALF FLORIDA CITRUS:

MR. ARTHUR B. CHADWELL

MR. GEORGE F. HAMNER

MR. PETER CHAIRES

DR. FRED GMITTER, JR.

OTHER APPEARANCES:

MR. PAUL GENKE

MR. EMERY SMITH

MR. LINDSAY RALEY

MR. SCOTT McCLURE

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CONTENTSWITNESS: PAGE

Marc McFetridge Examination By Mr. Hill . . . . . . . . . . . 19Examination By Ms. Schmaedick . . . . . . . . 45Arthur B. Chadwell Testimony . . . . . . . . . . . . . . . . . . 59Examination by Ms. Schmaedick . . . .104/125/143Examination by Mr. Hill . . . . . . . . . . . 91Examination By Mr. McFetridge . . . . . . . . 97

George F. Hamner Testimony . . . . . . . . . . . . . . . . . .151Examination By Ms. Schmaedick . . . . . 173/340

Paul GenkeTestimony . . . . . . . . . . . . . . . . . .143Examination By Ms. Schmaedick . . . .152,161,167Examination By Mr. McFetridge . . . . . . . .160Examination By Ms. Varela . . . . . . . . . .162Lindsay RaleyTestimony . . . . . . . . . . . . . . . . . .225Examination By Ms. Schmaedick . . . . . . . .233Examination By Mr. Hill . . . . . . . . . . .241

Examination By Mr. McFetridge . . . . . . . .242

Emery Smith, IITestimony . . . . . . . . . . . . . . . . . .250Examinat6ion By Ms. Schmaedick. . . . . . . .258Examination By Mr. McFetridge . . . . . . . .260

Frank Hunt (on behalf of Peter Chaires)Testimony . . . . . . . . . . . . . . . . . .269Examination By Ms. Schmaedick . . . . . . . .279Frank Hunt, IIITestimony . . . . . . . . . . . . . . . . . .285

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Fred Gmitter, Jr.Testimony . . . . . . . . . . . . . . . . . .242Examination By Ms. Schmaedick . . . . . . . .302Quentin RoeTestimony . . . . . . . . . . . . . . . . . .347Examination By Ms. Schmaedick . . . . . . . .361Examination By Ms. Varela . . . . . . . . . .366Norman Larry Black, Jr.Testimony . . . . . . . . . . . . . . . . . 373Examination By Ms. Schmaedick . . . . . . . .384

EXHIBITS MARK/RECD

1. . . . . . . . . . . . . . . . . . . . .16/18 2. . . . . . . . . . . . . . . . . . . . .16/18 3. . . . . . . . . . . . . . . . . . . . .18/18 4. . . . . . . . . . . . . . . . . . . . .18/18 5. . . . . . . . . . . . . . . . . . . . .22/44 6. . . . . . . . . . . . . . . . . . . . .22/50 7. . . . . . . . . . . . . . . . . . . . .52/52 8. . . . . . . . . . . . . . . . . . . . .57/58 9. . . . . . . . . . . . . . . . . . . . 59/14510. . . . . . . . . . . . . . . . . . . . 59/14511. . . . . . . . . . . . . . . . . . . .148/18212. . . . . . . . . . . . . . . . . . . .148/183

13. . . . . . . . . . . . . . . . . . . .149/18414. . . . . . . . . . . . . . . . . . . .150/18415. . . . . . . . . . . . . . . . . . . .150/19416. . . . . . . . . . . . . . . . . . . .190/19017. . . . . . . . . . . . . . . . . . . .218/21818. . . . . . . . . . . . . . . . . . . .218/22419. . . . . . . . . . . . . . . . . . . .218/224

20. . . . . . . . . . . . . . . . . . . .224/22421. . . . . . . . . . . . . . . . . . . .225/24722. . . . . . . . . . . . . . . . . . . .250/26523. . . . . . . . . . . . . . . . . . . .268/27824. . . . . . . . . . . . . . . . . . . .284/34425. . . . . . . . . . . . . . . . . . . .291/34426. . . . . . . . . . . . . . . . . . . .346/373

27. . . . . . . . . . . . . . . . . . . .373/38728-32 . . . . . . . . . . . . . . . . . .401/401

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1 P-R-O-C-E-E-D-I-N-G-S

2 (9:00 a.m.)

3 JUDGE CLIFTON: This record is

4 being made in Winter Haven, Florida on April

5 24, a Wednesday, 2013. My name is Jill

6 Clifton, I'm a United States Administrative

7 Law Judge and I'm here to conduct the

8 rulemaking hearing. What that means is I'm

9 the monitor to keep everyone's opportunity to

10 present evidence, open so that we have a full

11 record, and then after the hearing, to certify

12 what the evidence is. There are two kinds:

13 testimony and exhibits.

14 If you have an exhibit and you

15 want it marked as part of the evidence, it

16 being admitted as an exhibit makes it

17 evidence. Many people want also to read their

18 exhibit so that, if someone is searching the

19 transcript of the hearing, the same ideas are

20 there as well in the exhibit. It's perfectly

21 fine to have your evidence presented both

22 those ways, both as a written copy that is

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1 marked and accepted as an exhibit, and as

2 something that you read aloud so that it would

3 be in the transcript.

4 I want to cover a few housekeeping

5 things before I have you introduce yourselves.

6 And when I have you introduce yourselves, I'd

7 like you to spell your name. Now, there will

8 be some redundancy here because when you come

9 to testify, I'd like you to say who you are

10 and spell your name again. But I'd much

11 rather have it done too often than not often

12 enough. And as you can imagine, typing the

13 transcript from this town meeting atmosphere

14 is somewhat difficult, because each time the

15 speaker needs to be identified.

16 All right. So, the first thing

17 I'd like to do is read into the record the

18 heading caption and docket numbers. United

19 States Department of Agriculture, Before the

20 Secretary of Agriculture, in re: Oranges,

21 Grapefruit, Tangerines, and Tangelos (Citrus)

22 Grown in Florida, AMAA, Docket Nos. A0-13-

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1 0163; FV-13-905-1; AMS-FV-12-0069. I did not

2 recite where the hyphens are because the court

3 reporter has the written copy.

4 When you're citing from your own

5 prepared statement, you may want to put in

6 little punctuation marks, or not, just

7 depending on how you want to clarify what

8 you're presenting.

9 All right. With regard to this

10 transcript that is being prepared, the

11 original copy, the first copy is a high-priced

12 one under a contract with Neal Gross whereby

13 the first copy is the market price copy, and

14 USDA AMS pays for that. Thereafter, the

15 additional copies are at a very inexpensive

16 rate. And if any of you wants to order a

17 copy, you may do it so long as you order it

18 from the court reporter while we're still here

19 and get the bargain rate.

20 The bargain rate is about 5 cents

21 a page. And you could order just your own

22 testimony, or just the testimony of a certain

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1 witness you wanted, or the whole thing. And

2 if you also want an accompanying DVD or CD,

3 that's $300. There's usually a separate one

4 for each day of the hearing. And that's

5 searchable and you can specify what language

6 you want it in such as WordPerfect plus PDF

7 plus Microsoft Word, whatever you want. So,

8 be thinking about whether you want to order

9 any transcript of your own, and if so, let me

10 help you fill out the form so that it's clear

11 that you're getting the USDA contract rate for

12 that because the form itself doesn't provide

13 that.

14 Now, you've all been warned not to

15 participate in ex parte communication with

16 USDA officials. I want all of the USDA people

17 to identify themselves. You can talk with

18 them about the procedures here, about timing

19 of witnesses, about anything like that. You

20 can talk with them about anything that's of

21 interest, sports, weather, law enforcement,

22 anything like that. What you may not do is

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1 try to influence them in any way as to how

2 their decisions should be made. So, you have

3 to be very careful if you're trying to talk

4 about the marketing order or your experience

5 under it because it just would be perceived

6 that you are trying to influence them.

7 So, I want now -- oh, before I do

8 this, I like mobile phones, I think you should

9 have yours with you. If you have not yet put

10 it on vibrate or silent, please do that.

11 Sometimes you'll have to take a call and

12 you'll need to go out to do that, but I don't

13 want anyone to feel you're not allowed to use

14 your mobile phone. Just make it so it doesn't

15 interrupt.

16 All right. I'm a USDA employee,

17 an Administrative Law Judge who is assigned to

18 USDA to do USDA cases. So, every case I hear

19 has USDA involved in some way or another.

20 I'd like now for the rest of the

21 people in this room who work for the United

22 States Department of Agriculture to locate

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1 near a microphone to identify yourself.

2 Mr. Hill, would you begin?

3 MR. HILL: Yes, my name is Brian

4 Hill,

5 B-r-i-a-n H-i-l-l. I'm with the Office of the

6 General Counsel and I'm representing the

7 Agricultural Marketing Service.

8 MR. McFETRIDGE: I am Marc

9 McFetridge, M-a-r-c M-c-F-e-t-r-i-d-g-e. I'm

10 with the Ag Marketing Service, Fruit and

11 Vegetable Programs, Promotion and Economic

12 Division.

13 MS. SCHMAEDICK: My name is

14 Melissa Schmaedick, M-e-l-i-s-s-a, Schmaedick,

15 S-c-h-m-a-e-d-i-c-k. I am with the USDA

16 Agricultural Marketing Service, Fruit and

17 Vegetable Programs. I am a Senior Marketing

18 Specialist.

19 MS. SHARROW: My name is Michelle

20 Sharrow, Michelle, M-i-c-h-e-l-l-e, Sharrow,

21 S-h-a-r-r-o-w. And I am the Rulemaking Branch

22 Chief with AMS Fruit and Vegetable Programs.

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1 MS. VARELA: My name is Jennie

2 Varela, J-e-n-n-i-e, V-a-r-e-l-a. I am with

3 AMS, Agricultural Marketing Service,

4 representing the Southeast Marketing Field

5 Office.

6 MS. BRIGHT: I'm Kathleen Bright,

7 K-a-t-h-l-e-e-n B-r-i-g-h-t. I am also a

8 Senior Marketing Specialist, I am with the

9 Marketing Order and Agreement Division as

10 well.

11 JUDGE CLIFTON: Are there any

12 other USDA employees here?

13 MR. ELLIOTT: Yes. Yes, ma'am.

14 My name is Corey Elliott, I'm a USDA Marketing

15 Specialist representing the Southeast

16 Marketing Field Office. Again, Corey Elliott,

17 C-o-r-e-y E-l-l-i-o-t-t.

18 MR. NISSEN: My name is Christian

19 Nissen, C-h-r-i-s-t-i-a-n N-i-s-s-e-n. I am

20 the Regional Director of the Southeast

21 Marketing Field Office.

22 MS. LOWENSTINE: I'm Dolores

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1 Lowenstine, D-o-l-o-r-e-s L-o-w-e-n-s-t-i-n-e.

2 And I'm the Marketing Assistant with the

3 Southeast Marketing Field Office.

4 JUDGE CLIFTON: All right. Are

5 there any other USDA employees in the room?

6 All right. Those of you who are

7 normally officed in Washington, DC, please

8 raise your hand. All right. Those of you who

9 are normally in Florida, I think those of you

10 who introduced yourselves last are, and who is

11 seated at this front table is normally here?

12 All right, Ms. Varela. All right. And those

13 of you who are normally officed in Utah,

14 please raise your hand.

15 And in what locales have you

16 participated in rulemaking hearings, Ms.

17 Schmaedick?

18 MS. SCHMAEDICK: This is Melissa

19 Schmaedick. I have participated in roughly a

20 dozen rulemaking hearings in Florida, Oregon,

21 Washington, California, and then most recently

22 across the United States for the leafy green

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1 marketing agreement hearings.

2 JUDGE CLIFTON: All right. Now,

3 part of this, and I'm going to have those who

4 are not USDA employees who are here introduce

5 themselves next, part of this is a practice on

6 where we need to be for these microphones to

7 be effective. So, I'm going to go off record

8 just a moment.

9 (Off the record.)

10 JUDGE CLIFTON: All right. We're

11 back on record at 9:12. I'd now like to turn

12 to the table of Florida citrus people located

13 to my right and have each of you introduce

14 yourselves similarly.

15 MR. CHADWELL: My name is Arthur

16 Chadwell, A-r-t-h-u-r C-h-a-d-w-e-l-l. I'm

17 the Manager of the Citrus Administrative

18 Committee.

19 MR. HAMNER: My name is George

20 Hamner, Jr., G-e-o-r-g-e H-a-m-n-e-r, Jr., J-

21 r. And I'm a grower-shipper here in Florida.

22 MR. CHAIRES: My name is Peter

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1 Chaires, P-e-t-e-r C-h-a-i-r-e-s. I'm

2 Executive Vice President of Florida Citrus

3 Packers.

4 DR. GMITTER: My name is Fred

5 Gmitter, Jr. Fred, F-r-e-d, Gmitter, G-m-i-t-

6 t-e-r, Jr. I'm a Professor at the University

7 of Florida, Citrus Research and Education

8 Center in Lake Alfred.

9 JUDGE CLIFTON: Good. And those

10 of you who are not seated at that table but

11 are involved in Florida citrus, would each of

12 you come to the podium and identify yourself

13 and spell your name at this time?

14 MR. GENKE: My name is Paul Genke,

15 P-a-u-l G-e-n-k-e. And I'm Director of Sales

16 and Marketing for the Packers of Indian River

17 in Vero Beach, Florida.

18 MR. SMITH: My name is Emery

19 Smith, E-m-e-r-y S-m-i-t-h. I work for Ben

20 Hill Griffin, Inc., a grower-shipper here in

21 Florida.

22 JUDGE CLIFTON: Would you spell

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1 your first name again for me?

2 MR. SMITH: Emery, E-m-e-r-y.

3 JUDGE CLIFTON: E-r-y. I knew

4 that was something I didn't quite catch, thank

5 you.

6 MR. RALEY: Good morning. My name

7 is Lindsay Raley, L-i-n-d-s-a-y R-a-l-e-y.

8 I'm President and Chairman of the Board of

9 Dundee Citrus Growers Association and

10 Treasurer of the Citrus Administrative

11 Committee. Thank you.

12 MR. McCLURE: Good morning. I'm

13 Scott McClure, S-c-o-t-t M-c-C-l-u-r-e. I'm

14 the Research and Training Specialist for the

15 Division of Fruit and Vegetables.

16 JUDGE CLIFTON: Mr. Hill, I'd like

17 now to turn the meeting over to you for

18 whatever you would like to present at this

19 time.

20 MR. HILL: It's not much, so don't

21 worry about it. The first thing, first, we'd

22 like to mark some exhibits for addition to the

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1 record, the first one being the publication of

2 the notice of the hearing in the Federal

3 Register. We can mark that as Exhibit No. 1.

4 (Whereupon Exhibit No. 1

5 was marked for

6 identification.)

7 JUDGE CLIFTON: Yes. Now, I'm

8 just going to receive a copy but I'm going to

9 leave all the marking to the USDA team. And

10 so, Mr. Hill, this is just to be marked as EX-

11 1?

12 MR. HILL: Yes, I believe so.

13 JUDGE CLIFTON: All right, EX-1

14 for Exhibit 1. And all the exhibits, no

15 matter who they come from, will just be in

16 sequential order.

17 MR. HILL: Right. And the second

18 one I would also like to mark Exhibit No. 2

19 is a true copy of the notice of hearing to

20 interested persons.

21 (Whereupon Exhibit No. 2

22 was marked for

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1 identification.)

2 JUDGE CLIFTON: Now, Mr. Hill,

3 there are extra copies of these in the back,

4 is that correct? If someone wants one and

5 didn't get one?

6 MR. HILL: We could make some.

7 I'm not sure how many copies we have right

8 now. We have ten maybe, well, these we only

9 have five but we can make more copies if need

10 be.

11 JUDGE CLIFTON: Okay. Well, there

12 are still some back there. If there is anyone

13 who wants a copy of these and doesn't have it,

14 they're just back there with that wonderful

15 grapefruit juice and orange juice that we

16 have.

17 MR. HILL: The third exhibit would

18 be the press release.

19 And the fourth exhibit would be a

20 certificate of officials notified, the

21 Governor of Florida, would be No. 4.

22 If there is no objection, I'd like

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1 these three admitted to the record.

2 (Whereupon Exhibit Nos.

3 3 and 4 were marked for

4 identification.)

5 JUDGE CLIFTON: Is there any

6 objection to these four exhibits being

7 admitted into evidence? There is none.

8 Exhibits 1, 2, 3 and 4 are hereby admitted

9 into evidence.

10 (Whereupon Exhibit Nos.

11 1, 2, 3 and 4 were

12 received into evidence.)

13 MR. HILL: So, at this point, we'd

14 like to call our first and only witness for

15 now which would be Marc McFetridge.

16 JUDGE CLIFTON: All right. And if

17 you're seated at one of these two tables

18 closest to me, you're welcome to stay in place

19 to testify. Or if you would prefer, you can

20 come to the witness stand to my left. It's

21 your option.

22 Mr. McFetridge, please be seated

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1 elsewhere. You went in a seated position.

2 Please raise your right hand.

3 Whereupon,

4 MARC McFETRIDGE

5 was called as a witness and, having been first

6 duly sworn, was examined and testified as

7 follows:

8 JUDGE CLIFTON: Please begin by

9 stating and spelling your name.

10 THE WITNESS: My name is Marc

11 McFetridge,

12 M-a-r-c M-c-F-e-t-r-i-d-g-e.

13 JUDGE CLIFTON: Thank you. Mr.

14 Hill, you may proceed.

15 EXAMINATION

16 BY MR. HILL:

17 Q Okay. Hello, how are you doing

18 this morning?

19 A I'm doing well.

20 Q Very well, good. Okay, let's get

21 right into this then.

22 JUDGE CLIFTON: Now, there are

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1 copies for the rest of us so.

2 MR. HILL: Right.

3 BY MR. HILL:

4 Q We do have the copies of both your

5 testimony and some charts, is that correct?

6 A That is correct.

7 MR. HILL: I'm going to let these

8 be handed out very quickly.

9 JUDGE CLIFTON: Thank you.

10 BY MR. HILL:

11 Q While we're waiting for that, can

12 you just tell us once again, you've already

13 mentioned it, but who do you work for?

14 A I work for the Ag Marketing

15 Service, Fruit and Vegetable Programs,

16 Promotion and Economic Division. I'm an

17 agricultural economist.

18 Q And how long have you been doing

19 that?

20 A I have been an economist for over

21 three years now.

22 Q With the --

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1 A With USDA, yes.

2 Q Okay. And right now we're handing

3 out some documents. One is your testimony and

4 the other is some charts that you prepared?

5 A That is correct.

6 Q And you did prepare both of these

7 personally?

8 A Yes.

9 Q Okay. And in your preparation,

10 you did not prepare them to take a side, is

11 that correct?

12 A That is correct.

13 Q And you're not making, there is

14 nothing, you're not making anything off of

15 this, it's not personal for you?

16 A No, it is not.

17 Q Okay. If you can go ahead, you

18 can go ahead and start then.

19 JUDGE CLIFTON: Let me know which

20 is which as far as numbers please.

21 MR. HILL: Let's go ahead and mark

22 the testimony as Exhibit No. 5 if we could,

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1 which would leave the charts as Exhibit No. 6.

2 (Whereupon Exhibit Nos.

3 5 and 6 were marked for

4 identification.)

5 BY MR. HILL:

6 Q And to those, okay, you can begin.

7 A My name is Marc McFetridge. I've

8 worked for the US Department of Agriculture

9 (USDA) since 2006. I worked for the Marketing

10 Order Administration Division from July 2006

11 through December 2009. From December 2009 to

12 the present, I've worked with the Promotion

13 and Economic Division as an agricultural

14 economist. And my duties include preparing

15 economic and statistical analyses which are

16 used by government officials to help

17 administer federal programs for Fruits and

18 Vegetable Programs. All this part of my work

19 is related to the Federal Marketing Order

20 issues.

21 I received a Bachelor's degree in

22 Agriculture Business Management in 2001 from

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1 Oregon State University, and a Master's degree

2 in Agricultural and Resource Economics in 2004

3 from Oregon State University.

4 Concerning the various proposed

5 amendments, the Department takes a neutral

6 position. For the hearing on Florida citrus,

7 I've prepared a report titled "US and Florida

8 Citrus Crop Years 2000-01 through 2011-12."

9 The data source is the National Agricultural

10 Statistics Service (NASS USDA).

11 The purpose of the report is to

12 introduce US government data and other

13 relevant information into the hearing record.

14 JUDGE CLIFTON: Let me stop you

15 there. Let's go off record.

16 (Off the record.)

17 JUDGE CLIFTON: All right. We're

18 back on record at 9:23. Thank you, you may

19 resume, Mr. McFetridge.

20 THE WITNESS: These graphs are

21 intended to be used by all parties involved in

22 the hearing in discussion and analyzing the

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1 merits of the various proposed amendments. In

2 the report, graphs are shown for US. Data for

3 tangelos was only available from Florida, and

4 Florida for oranges, grapefruit, tangelos,

5 tangerines, and mandarins in bearing acres.

6 The graphs on pages 3 through 6

7 show the total bearing acres. For oranges,

8 bearing acres reached a high during the 2000-

9 01 crop year at 818,700 acres for the total US

10 and 605,000 acres for Florida. Since the --

11 JUDGE CLIFTON: Now, let me make

12 sure those numbers are right. So, the first

13 number of acres that you said is printed in

14 this transcript at 818,700?

15 THE WITNESS: Yes.

16 JUDGE CLIFTON: All right. And

17 the second number you said will be printed in

18 the transcript as 605,000?

19 THE WITNESS: That is correct.

20 JUDGE CLIFTON: All right, thank

21 you.

22 THE WITNESS: Would it be easier

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1 for me just to read out the numbers instead of

2 trying to --

3 JUDGE CLIFTON: No, you did fine.

4 It's just that it's tricky when you hear it,

5 trying to figure out how to type it. So, just

6 if you need to clarify as you go on or expand

7 on what you say, you may, and you do not have

8 to stick exactly to the script.

9 THE WITNESS: All right. Since

10 the 2000-01 crop year, bearing acres for

11 oranges have decreased 24 percent and 28

12 percent for the total US and Florida,

13 respectively. For grapefruit, bearing acres

14 reached a high for the 2000-01 crop year at

15 145,200 acres for the total US, and 107,800

16 acres for Florida. Since the 2000-01 crop

17 year, bearing acres for grapefruit have

18 decreased 49 percent and 58 percent for the

19 total US and Florida, respectively. For

20 tangelos, bearing acres reached a high for the

21 2000-01 crop year at 10,800 acres for Florida.

22 Note NASS, the National Agricultural Statistic

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1 Service, publishes data only for Florida on

2 tangelos, so no data for total US will be

3 available.

4 Since the 2000-01 crop year,

5 bearing acres for tangelos have decreased 62

6 percent. For tangerines and mandarins,

7 bearing acres reached a high for the 2011-12

8 crop year at 52,600 acres for the total US,

9 and reached a high for Florida at 25,500 acres

10 during the 2000-01 crop year. Note, NASS

11 published aggregated data combining tangerines

12 and mandarins. Since the 2000-01 crop year,

13 bearing acres for tangerines and mandarins

14 have increased 32 percent for the total US but

15 has decreased 53 percent for Florida.

16 Average yield. The graphs on

17 pages 7 through 10 show the average yield.

18 For oranges, the average yield reached a high

19 during the 2003-04 crop year at 382 and 428

20 boxes per acre for the total US and Florida,

21 respectively. The net pounds per box for

22 oranges in California is 80, for Florida it's

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1 90, Texas 85; grapefruit in California is 80,

2 Florida it's 85, Texas 80; tangerines,

3 mandarins in Arizona and California is 80, and

4 Florida is 95. That is the definition of how

5 boxes is represented from NASS.

6 The ten-year average yield for

7 oranges for the total US is 325 boxes per

8 acre, and 338 boxes per acre for Florida. For

9 grapefruit, the average yield reached a high

10 during the 2006-07 crop year for total US at

11 463 boxes per acre, and Florida reached a high

12 during the 2003-04 crop year at 497 boxes per

13 acre. The ten-year average yield for

14 grapefruit for the total US is 398 boxes per

15 acre, and 412 boxes per acre for Florida. For

16 tangelos, the average yield reached a high

17 during the 2007-08 crop year at 288 boxes per

18 acre.

19 The ten-year average yield for

20 tangelos is 211 boxes per acre. For

21 tangerines and mandarins, the average yield

22 reached a high during the 2010-11 crop year at

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1 322 and 363 boxes per acre for the total US

2 and Florida, respectively. The ten-year

3 average yield for tangerines and mandarins for

4 the total US is 265 boxes per acre and 298

5 boxes per acre for Florida.

6 Total utilized production. The

7 graphs on pages 11 through 14 show the total

8 utilized production. Utilized production is

9 defined as amount of crops sold plus the

10 quantity used at home or held in storage

11 represents utilized production. For oranges,

12 the total utilized production reached a high

13 during the 2003-04 crop year at 295 million

14 boxes and 242 million boxes for the total US

15 and Florida, respectively.

16 Since the 2000-01 crop year, total

17 utilized production for oranges has decreased

18 27 percent and 34 percent for the total US and

19 Florida, respectively. For grapefruit, the

20 total US utilized production reached a high

21 during the 2000-01 crop year at 59.8 million

22 boxes, and Florida reached a high during the

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1 2001-02 crop year at 46.7 million boxes.

2 Since the 2000-01 crop year, total utilized

3 production for grapefruit has decreased 53

4 percent and 59 percent for the total US and

5 Florida, respectively.

6 For tangelos, the total utilized

7 production reached a high during the 2002-03

8 crop year at 2.4 million boxes. Since the

9 2000-01 crop year, the total utilized

10 production for tangelos has decreased 45

11 percent. For tangerines and mandarins, the

12 total utilized production reached a high

13 during the 2010-11 crop year at 15.6 million

14 boxes, and Florida reached a high point during

15 the 2001-02 crop year at 6.6 million boxes.

16 Since the 2000-01 crop year, total utilized

17 production for tangerines and mandarins has

18 increased 82 percent for total US but has

19 decreased 23 percent for Florida.

20 Equivalent packinghouse door

21 returns. The graphs on pages 15 through 18

22 show the equivalent packinghouse door returns,

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1 also referred to as prices received by

2 growers. NASS reports the prices in terms of

3 equivalent packinghouse door returns. The

4 packinghouse door is generally referred to as

5 the point of first sale. Packinghouse door

6 prices are calculated by subtracting cost

7 incurred through the packinghouse from the

8 freight onboard price. These costs may

9 include sorting, grading, packing, cooling, et

10 cetera.

11 FOB or freight on board prices is

12 defined as the commercial price term that

13 signifies a contractual agreement between a

14 buyer and a seller to have the subject of a

15 sale delivered to a destination price usually

16 either --

17 JUDGE CLIFTON: Read that again

18 please, Mr. McFetridge.

19 THE WITNESS: Sure. You want me

20 to start from the beginning?

21 JUDGE CLIFTON: How about seller

22 to have the subject?

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1 THE WITNESS: Signifies a

2 contractual agreement between a buyer and a

3 seller to have a subject of a sale delivered

4 to a destination place, usually either the

5 place of shipment or the place of destination

6 without expense to the buyer. This term

7 indicates delivery will be made on board or

8 into a carrier by the shipper without charge.

9 For oranges, the prices received

10 by growers reached a high during the 2006-07

11 crop year at $17.45 per box for fresh oranges

12 for the total US, and $15.99 per box for fresh

13 oranges for Florida. The processed prices

14 were $11.48 per box for total US and $12.80

15 per box for Florida. The ten-year average

16 price received by growers for fresh oranges is

17 $12.59 per box for the total US and $9.89 per

18 box for Florida. The ten-year average price

19 received by growers for processed oranges is

20 $7.48 and $7.95 for total US and Florida,

21 respectively.

22 JUDGE CLIFTON: So, Mr.

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1 McFetridge, these last two figures were $7.48?

2 THE WITNESS: Yes.

3 JUDGE CLIFTON: And $7.95?

4 THE WITNESS: That's correct.

5 JUDGE CLIFTON: Okay, thanks.

6 THE WITNESS: For grapefruit, the

7 prices received by growers reached a high

8 during the 2004-05 crop year at $21.06 per box

9 for fresh grapefruit for the total US and

10 $21.89 per box for fresh grapefruit for

11 Florida. And processed prices reached a high

12 during the 2011-12 crop year for the total US

13 at $6.77 per box, and during the 2004-05 crop

14 year for Florida at $8.07 per box.

15 The ten-year average price

16 received by growers for fresh grapefruit is

17 $11.91 per box for total US and $12.11 per box

18 for Florida. The ten-year average price

19 received by growers for processed grapefruit

20 is $4.11 and $4.81 for the total US and

21 Florida, respectively.

22 For tangelos, the prices received

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1 by growers reached a high for fresh and

2 processed tangelos during the 2011-12 crop

3 year at $16.45 per box and $10.00 per box.

4 The ten-year average price received by growers

5 for fresh tangelos is $11.29 per box, and

6 $4.62 per box for processed tangelos.

7 For tangerines and mandarins, the

8 prices received by growers reached a high

9 during 2011-12 crop year at $26.68 per box of

10 fresh tangerines and mandarins for the total

11 US, and Florida reached a high during the

12 2006-07 crop year at $19.50 per box of fresh

13 tangerines and mandarins. Processed prices

14 for tangerines and mandarins reached a high

15 during the 2006-07 crop year at $6.61 per box

16 and $9.89 per box for total US and Florida,

17 respectively.

18 The ten-year average price

19 received by growers for fresh tangerines and

20 mandarins is $20.70 per box for total US and

21 $16.27 per box for Florida. The ten-year

22 average price received by growers for

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1 processed tangerines and mandarins is $3.34

2 and $4.87 for the total US and Florida,

3 respectively.

4 Total value production. The

5 graphs on pages 19 through 22 show the total

6 value production. For oranges, the total

7 value production reached a high during the

8 2011-12 crop year for the total US at over

9 $2.3 billion. And the total value production

10 reached a high for Florida during the 2006-07

11 crop year at almost $1.6 million.

12 MR. HILL: Can you repeat that

13 number one more time? 1.6?

14 THE WITNESS: Sure, $1.6 million.

15 JUDGE CLIFTON: Is it million or

16 billion?

17 THE WITNESS: Oh, I'm sorry, it's

18 billion.

19 I'm getting towards the end. My eyes are

20 getting a little fuzzy.

21 MR. HILL: So, it's $1.6 billion?

22 THE WITNESS: $1.6 billion. The

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1 ten-year average value production for oranges

2 for the total US is slightly over $1.9

3 billion, and $1.24 billion for Florida. For

4 grapefruit, the total value production reached

5 a high during the 2004-05 crop year for the

6 total US at over $383 million, and the total

7 value production reached a high point for

8 Florida during the 2003-04 crop year at $225

9 million. The ten-year average value

10 production for grapefruit for the total US is

11 almost $296 million, and $195 million for

12 Florida.

13 For tangelos, the total value

14 production reached a high during the 2011-12

15 crop year at over $14.3 million. The ten-year

16 average value production for tangelos is $9.9

17 million.

18 For tangelos and tangerines, the

19 total value production --

20 JUDGE CLIFTON: Wait a minute.

21 Start that sentence again please.

22 THE WITNESS: For tangerines and

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1 mandarins, the total value production reached

2 a high during the 2011-12 crop year for the

3 total US at over $351 million, and total value

4 production reached a high for Florida during

5 the 2001-02 crop year at $76 million. The

6 ten-year average value production for

7 tangerines and mandarins for the total US is

8 almost $189 million, and $63.8 million for

9 Florida.

10 BY MR. HILL:

11 Q Thank you very much for this. And

12 just one more comment. I just want to make

13 clear that you prepared this for anyone to use

14 at this hearing, and not for a particular

15 size, is that correct?

16 A That is correct. I've also

17 included in my chart, there is a page, I

18 believe 23 that has just some definitions for

19 boxes that I've also covered in my testimony,

20 so they can be a standalone piece if need be.

21 JUDGE CLIFTON: I'd like you to

22 read that into the record. It's very helpful.

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1 THE WITNESS: Sure.

2 JUDGE CLIFTON: Do you have it? I

3 think it is 23 of your chart.

4 THE WITNESS: Sure.

5 JUDGE CLIFTON: And before you do

6 that, in this last section, when you were

7 referring to these values of production, if

8 you didn't say dollars, we know you were

9 talking about dollars. For example, 189

10 million was $189 million?

11 THE WITNESS: That's correct.

12 JUDGE CLIFTON: Okay. All right,

13 go ahead then with page 23 of your Exhibit 6.

14 THE WITNESS: So, it is entitled

15 End Notes. The first end note is citrus crop

16 year, begins with the bloom of the first year

17 listed and ends with the harvest year with the

18 year harvest is completed.

19 JUDGE CLIFTON: So, it ends with

20 the year that harvest is completed, and we

21 don't know what month because it varies?

22 THE WITNESS: That is correct.

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1 JUDGE CLIFTON: Okay. And same

2 with the bloom, we don't know what month

3 because it varies?

4 THE WITNESS: That's correct.

5 JUDGE CLIFTON: Okay.

6 THE WITNESS: Second end note,

7 boxes, net pounds per box for oranges in

8 California is 80, for Florida it's 90, for

9 Texas 85; for grapefruit in California it's

10 80, Florida 85, Texas is 80; for tangerines

11 and mandarins in Arizona and California it is

12 80, and in Florida it's 95.

13 Looks like I have a typo, it

14 should be utilized production, and that's

15 defined as the difference between total and

16 utilized production which is marketable fruit

17 not harvested for economic or natural reasons,

18 and harvested fruit not sold or utilized is

19 utilized production.

20 JUDGE CLIFTON: I don't think

21 that's what you meant.

22 THE WITNESS: Let's see here.

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1 Looks like there's another typo in that one,

2 that's not correct. Is that what you're

3 referring to, Judge?

4 JUDGE CLIFTON: Well, look at the

5 whole thing and decide how it should read and

6 tell us.

7 THE WITNESS: All right. Well,

8 let me refer back to my testimony now. I

9 believe my testimony actually should be the

10 correct one. I believe I made an error and

11 did not carry over the definition from my

12 testimony to my graphs and charts. So,

13 actually --

14 JUDGE CLIFTON: Well, now are you

15 sure? Because the way you've got it here

16 looks right to me without changing. In other

17 words, it looks to me like you're properly

18 defining unutilized production.

19 THE WITNESS: Oh, that's where,

20 unutilized production, yes, it actually should

21 be. That's where the error is. It should

22 have been utilized production and not

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1 unutilized production.

2 JUDGE CLIFTON: Well, I don't

3 know. Let me read it just the way you have it

4 and tell me if this is right.

5 THE WITNESS: All right.

6 JUDGE CLIFTON: Unutilized

7 production. The difference between total and

8 utilized production which is marketable fruit

9 not harvested for economic or natural reasons,

10 and harvested fruit not sold or utilized is

11 unutilized production.

12 THE WITNESS: Yes, that would be

13 the correct definition. But I believe I made

14 an error and I copied down the definition for

15 unutilized production instead of putting in

16 utilized production. That's where my error

17 was. So, that definition is correct, just

18 when I was going through and editing my end

19 notes, I believed I looked at the wrong entry

20 from NASS as their definitions and put in

21 unutilized instead of the next or previous

22 entry which should have been utilized

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1 production. Because if we look on page --

2 BY MR. HILL:

3 Q 3? 3 to 4?

4 A So, it would have been for total

5 utilized production which begins on page 11

6 through page 14, I was putting in the utilized

7 production because that's what was titled in

8 the graph instead of unutilized production.

9 So, that was my error that I made.

10 JUDGE CLIFTON: Okay. So, the

11 definition that you show on page 23 is

12 correct.

13 THE WITNESS: It is a correct

14 definition.

15 JUDGE CLIFTON: And what you want

16 to do is you want to add one for us, another

17 end note that will be the definition of

18 utilized production.

19 THE WITNESS: Yes.

20 JUDGE CLIFTON: Will you need to

21 go to a computer to do that where it's

22 explained in some website?

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1 THE WITNESS: It's in my

2 testimony, I have utilized production defined,

3 and so I could just read that in if possible.

4 JUDGE CLIFTON: Okay, that's

5 great. Tell us what page of your testimony.

6 THE WITNESS: So, on page 3,

7 bottom, last sentence begins, "Utilized

8 production is defined as the amount of a crop

9 sold plus the quantities used at home or held

10 in storage represents utilized production."

11 JUDGE CLIFTON: Very good.

12 MR. HILL: So, your Honor, should

13 we add that as End Note 6? Or just read that

14 onto the record?

15 JUDGE CLIFTON: You know, it's up

16 to you all. For the reviewer of all these

17 documents, it really would be nice if it is

18 added as End Note 6. It really would be

19 helpful. So, let's have Mr. McFetridge, at a

20 break, retrieve the copy from Kathleen Bright

21 because that will be the record copy and it

22 will be from that copy that postings are made

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1 to the website. For the rest of us here, we

2 don't so much need our copies changed. But

3 that would be great.

4 THE WITNESS: Yes, no problem.

5 JUDGE CLIFTON: Okay, good. All

6 right, so we interrupted you. So, you were

7 about to go on to your next end note.

8 THE WITNESS: Yes. End note for

9 packinghouse door price. Packinghouse door is

10 generally referred to as a point of first

11 sale. Packinghouse door prices are calculated

12 by subtracting costs incurred through the

13 packinghouse from the freight on board price

14 or FOB. These costs may include sorting,

15 grading, packing, cooling, et cetera.

16 And then my fifth end note was the

17 freight on board price (FOB), that's defined

18 as a commercial price term that signifies a

19 contractual agreement between a buyer and a

20 seller to have a subject of a sale delivered

21 to a designated place, usually either the

22 place of shipment or the place of destination

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1 without expense to the buyer. This term

2 indicates delivery will be made on board or

3 into a carrier by the shipper without charge.

4 The abbreviation FOB is usually followed by a

5 shipping point or destination. Reports from

6 fresh fruit sales organizations and from

7 citrus packers provide data for an average FOB

8 price.

9 MR. HILL: I would like to move

10 Exhibit No. 5 which is his written testimony

11 into evidence if there is no problem with

12 that.

13 JUDGE CLIFTON: Is there any

14 objection to the admission into evidence of

15 Exhibit 5? There is none. Exhibit 5 is

16 admitted.

17 (Whereupon Exhibit No. 5

18 was received into

19 evidence.)

20 MR. HILL: And -- I'm sorry.

21 JUDGE CLIFTON: And I'd like to

22 wait until he has made the correction to 6 and

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1 then have him again testify and read that into

2 the record, and then we'll deal with that one.

3 MR. HILL: That's good. That's

4 what I was going to ask if you wanted to.

5 JUDGE CLIFTON: Very good. All

6 right. Do you have any other questions, Mr.

7 Hill, of this witness at this time?

8 MR. HILL: I'm going to defer to

9 Melissa if she has any questions.

10 JUDGE CLIFTON: Ms. Schmaedick?

11 MS. SCHMAEDICK: This is Melissa

12 Schmaedick. Can you hear me?

13 JUDGE CLIFTON: Yes.

14 EXAMINATION

15 BY MS. SCHMAEDICK:

16 Q This is Melissa Schmaedick. Good

17 morning, Mr. McFetridge.

18 A Good morning.

19 Q Thank you for your testimony. I

20 just have a couple of questions for you. For

21 charts 1 through 15, you referred to total

22 bearing acres, total yield, so on and so

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1 forth.

2 A Yes.

3 Q When you use the term total, does

4 that total include, for example, bearing acres

5 of fresh oranges that are used as fresh

6 product as well as oranges that are used as a

7 processed product?

8 A That is correct. It could include

9 both fresh and processed.

10 Q Okay, so they're aggregated

11 together in the tables?

12 A Yes.

13 Q And then for tangelos, you

14 mentioned that NASS only carries data for

15 Florida. Can you explain why only Florida is

16 represented in NASS data?

17 A I can't speak specifically, but I

18 believe it is for confidentiality purposes.

19 Other states that produce tangelos, it could

20 be such a small quantity that if published

21 then competitors could know what they're doing

22 and it would be an unfair advantage to them.

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1 Q So, to your knowledge, is there

2 any other commercial production of tangelos in

3 the United States?

4 A I'm not sure.

5 MS. SCHMAEDICK: Thank you. Those

6 are my questions.

7 JUDGE CLIFTON: Thank you, Ms.

8 Schmaedick. Mr. Hill, do you have any further

9 questions of Mr. McFetridge at this time?

10 MR. HILL: I do not, your Honor.

11 JUDGE CLIFTON: All right. Does

12 anyone else at USDA have any further questions

13 of Mr. McFetridge at this time?

14 (No response.)

15 JUDGE CLIFTON: All right, then

16 I'd invite the industry to ask, if any of you

17 have any questions. So, if you do, just get

18 my attention and I'll call on you.

19 (No response.)

20 JUDGE CLIFTON: Well done, Mr.

21 McFetridge. You may step down. I'd like to

22 take a comfort break at this time. Let's take

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1 ten minutes and reconvene at three minutes

2 after 10:00.

3 (Short recess.)

4 JUDGE CLIFTON: All right. We're

5 back on record at 10:05. Let's see, where

6 were we? We were about to start with what,

7 Mr. Hill?

8 MR. HILL: Well, I think we have

9 finished. We don't have any more witnesses.

10 JUDGE CLIFTON: All right. No

11 other witnesses from USDA?

12 MR. HILL: No, your Honor.

13 JUDGE CLIFTON: All right. And

14 when do you want to recall Mr. McFetridge to

15 talk about the addition to that exhibit?

16 MR. HILL: Okay, we're just

17 waiting to print this, so if you can give me

18 one moment?

19 JUDGE CLIFTON: Oh, you're doing

20 it very formally. I expected just a

21 handwritten thing. All right, well, let's

22 just keep going and we'll come back to that

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1 later then.

2 MR. HILL: I guess we will do the

3 handwritten so we can, yes, we do have a copy

4 here. She has a handwritten copy.

5 JUDGE CLIFTON: Oh, good. Let's

6 leave Mr. McFetridge in place where he is.

7 And Mr. McFetridge, you remain sworn. Looking

8 at your Exhibit 6, what have you added?

9 THE WITNESS: I have added on page

10 23 in the End Notes a number 6 footnote for

11 utilized production which is defined as the

12 amount of crop sold plus the quantity used at

13 home or held in storage represents utilized

14 production.

15 JUDGE CLIFTON: Excellent, thank

16 you. And Mr. Hill?

17 MR. HILL: And I would like to go

18 ahead and enter that into the record as

19 evidence, as an exhibit.

20 JUDGE CLIFTON: Is there any

21 objection to the admission into evidence of

22 Exhibit 6? There is none. Exhibit 6 is

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1 admitted into evidence. Thank you.

2 All right. Now, who will be the

3 first person to testify? I'm going to say

4 from the industry, referring to citrus

5 industry.

6 Oh, you want me to go by the

7 written sheet that I already have. Very good.

8 Then I would call Mr. Chadwell and ask him

9 please to be seated so that I can swear him in

10 and then I'll have him identify himself.

11 Would you raise your right hand

12 please?

13 (Whereupon Exhibit No. 6

14 was received into

15 evidence.)

16 Whereupon,

17 ARTHUR B. CHADWELL

18 was called as a witness and, having been first

19 duly sworn, was examined and testified as

20 follows:

21 JUDGE CLIFTON: Please state and

22 spell your name.

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1 THE WITNESS: Arthur Chadwell, A-

2 r-t-h-u-r C-h-a-d-w-e-l-l.

3 JUDGE CLIFTON: Thank you. You

4 may proceed.

5 THE WITNESS: Thank you. I have

6 my testimony in three exhibits that I would

7 like to enter.

8 JUDGE CLIFTON: All right. First,

9 how many copies do you have that you want to

10 give away?

11 THE WITNESS: I have ten if

12 needed.

13 JUDGE CLIFTON: Excellent. My

14 priority is, the number one is the one that

15 Kathleen Bright will keep, just the record

16 copy. Then I want one to look at, and I want

17 the court reporter to have one to look at.

18 And from there, I would think you would get

19 one to Ms. Schmaedick and one to Mr. Hill.

20 And how many have I named? About five of

21 them?

22 THE WITNESS: Five copies.

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1 JUDGE CLIFTON: All right. And

2 then with regard to the other five, I have no

3 priority and you may proceed as you wish. And

4 let's go off record while the documents are

5 distributed.

6 (Off the record.)

7 JUDGE CLIFTON: All right. We're

8 back on record at 10:11. Mr. Chadwell, you

9 may proceed.

10 THE WITNESS: Okay. First, I

11 would like to enter two exhibits, or three

12 depending. The first exhibit is a Citrus

13 Industry Glossary. It's terms that are

14 commonly used in our industry.

15 JUDGE CLIFTON: I think you're

16 wonderful. This is great to have this. All

17 right, let's call that Exhibit 7. Exhibit 7

18 is the Citrus Industry Glossary.

19 And what, describe for us what the

20 tables are if you will.

21 (Whereupon Exhibit No. 7

22 was marked for

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1 identification and

2 received into evidence.)

3 THE WITNESS: Okay. The next

4 exhibit I have produced, four tables. Table

5 1 is for oranges, early midseason in navels,

6 Valencia and late type oranges. It's a ten-

7 year average of bearing acreage, production,

8 boxes per acre, percent fresh utilization,

9 percent processed utilization, on tree return

10 for fresh, on tree for processed, combined on

11 tree, and a total value per acre. And Table

12 1 is for oranges.

13 Table 1-A, I broke out navel

14 oranges on their own and it's the same ten

15 seasons, bearing acreage, production, boxes

16 per acre, fresh utilization, processed

17 utilization, on tree fresh, on tree processed,

18 combined on tree, total revenue per acre.

19 Table 2, white and red grapefruit,

20 ten seasons, bearing acreage, production,

21 boxes per acre, fresh utilization, processed

22 utilization, on tree return fresh, on tree

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1 return processed, combined on tree, total

2 revenue per acre.

3 Table 3, Temple oranges and

4 tangelos, Temple oranges ten seasons. It must

5 be noted that after the '05-'06, we quit as an

6 industry recording Temples, so that's limited

7 there but it's the same seasons, bearing

8 acreage, production, boxes per acre, fresh

9 utilization, processed utilization, on tree

10 fresh, on tree processed, combined on tree,

11 and the total acre. Then tangelos, ten

12 seasons, bearing acreage, production, boxes

13 per acre, percent fresh, percent processed

14 utilization, on tree fresh, on tree processed,

15 combined on tree, and total revenue per acre.

16 Table 4 is tangerines, early

17 tangerines which consist of Fallglo and

18 Sunburst, ten seasons, bearing acreage,

19 production per season, boxes per acre, fresh

20 utilization, processed utilization, on tree

21 fresh, on tree processed, combined on tree,

22 and the total revenue.

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1 Honey tangerines, ten seasons,

2 bearing acreage, production, boxes per acre,

3 fresh utilization, fresh processed, fresh on

4 tree, processed on tree, combined on tree,

5 total revenue per acre.

6 And then also is Table 5 which is

7 utilized in the testimony. And what I did on

8 Table 5, it is specialty citrus. Specialty

9 citrus are tangelos, Temples and tangerines

10 combined, and we're going to utilize that as

11 fresh specialty citrus. And we have for the

12 1987-88 season, the 1997-98, and the 2011-12

13 by variety the bearing acreage, production,

14 boxes, utilization fresh/processed, and total

15 processed. And this is just to break these

16 varieties up for information.

17 JUDGE CLIFTON: Now, all of these

18 tables that you've just identified, were you

19 wanting to capture information for Florida

20 production?

21 THE WITNESS: This is all Florida.

22 JUDGE CLIFTON: All Florida.

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1 THE WITNESS: Yes, ma'am.

2 JUDGE CLIFTON: Excellent. Who

3 double checked you getting these numbers off

4 the NASS statistics? Anyone? Did anyone

5 double check you to make sure you got the

6 right numbers here?

7 THE WITNESS: Just my assistant

8 who works with me, I mean but we work everyday

9 with NASS numbers. We have a close working

10 relationship and we utilize NASS numbers in

11 addition to our numbers that we generate to do

12 reporting. So, we are in daily contact with

13 FASS, Florida Agricultural Statistics Service,

14 and we provide them information mainly from

15 the fresh because we're fresh oriented, and

16 they provide us processed. But we work

17 together with FASS to produce reports for the

18 State of Florida.

19 JUDGE CLIFTON: Excellent. So,

20 your office is really a very reliable place to

21 gather this information?

22 THE WITNESS: Correct. And these,

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1 and we'll get into this later, and all these

2 numbers are certified numbers through the

3 Inspection Service. And so, we have fresh,

4 our fresh numbers, we don't post those until

5 they are certified by the Florida Department

6 of Agriculture. So, everything here is

7 certified by the state, and then it's a

8 combination of FASS reporting and our

9 reporting.

10 JUDGE CLIFTON: Very, very

11 helpful. All right, shall I mark these tables

12 as Exhibit 8? And Mr. Chadwell, is there

13 anything else you want to tell us about these

14 tables that I have marked as Exhibit 8 before

15 I see if there is any objection to this being

16 admitted as an exhibit?

17 (Whereupon Exhibit No. 8

18 was marked for

19 identification.)

20 THE WITNESS: No. And not only in

21 my testimony but in some of the others, we

22 will refer at points in times to those tables

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1 as identified.

2 JUDGE CLIFTON: Is there any

3 objection to the admission into evidence of

4 Exhibit 8? There is none, Exhibit 8 is

5 admitted into evidence.

6 And shall we mark your testimony

7 as the next exhibit or this Citrus

8 Administrative Committee report?

9 (Whereupon Exhibit No. 8

10 was received into

11 evidence.)

12 THE WITNESS: In order, the

13 testimony and then the PowerPoint will be

14 following that.

15 JUDGE CLIFTON: All right. Then

16 let's mark the testimony of Arthur B. Chadwell

17 as Exhibit 9. And let's mark the Citrus

18 Administrative Committee PowerPoint as Exhibit

19 10.

20 Mr. Chadwell, you may proceed.

21 (Whereupon Exhibit Nos.

22 9 and 10 were marked for

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1 identification.)

2 THE WITNESS: Can I get my water

3 please?

4 JUDGE CLIFTON: Yes, certainly.

5 DIRECT TESTIMONY

6 THE WITNESS: General

7 Introduction. My name is Arthur B. Chadwell,

8 A-r-t-h-u-r B. C-h-a-d-w-e-l-l. I reside at

9 723 Success Avenue, Lakeland, Florida. I am

10 the manager of the Citrus Administrative

11 Committee which administers Federal Marketing

12 Order No. 905, Oranges, Grapefruit, Tangerines

13 and Tangelos Grown in Florida. Due to the

14 number of citrus-related terms that will be

15 used in testimony today, I have included a

16 glossary of terms. Also included are four

17 tables which include by variety for the past

18 ten seasons bearing acreage production,

19 production per acre, utilization both fresh

20 and processed, and on tree returns.

21 This next sentence I should have

22 deleted because I've deleted the charts and

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1 graphs. Okay?

2 JUDGE CLIFTON: Now, when you say

3 you should have deleted, obviously you're not

4 going to read it as part of your testimony,

5 but shall we also cross it off on Exhibit 9?

6 Do you want it crossed out?

7 THE WITNESS: Yes.

8 JUDGE CLIFTON: Okay. Then Ms.

9 Bright? Ms. Bright, I want you to read into

10 the record what you're crossing out.

11 MS. BRIGHT: Starting at "Also",

12 correct?

13 THE WITNESS: "There are also,"

14 correct.

15 MS. BRIGHT: "There are also

16 charts for production and fresh shipments for

17 the past ten seasons, and a pie chart of fresh

18 shipments by variety for the 2011-12 season."

19 JUDGE CLIFTON: Thank you. And

20 you may resume, Mr. Chadwell.

21 THE WITNESS: The Florida citrus

22 industry has a long history of cooperation

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1 among government entities, industry

2 organizations, competing growers and handlers.

3 I will identify the major organizations that

4 work for the benefit of the Florida citrus

5 industry and to provide a brief introduction

6 to their activities.

7 Government entities. Citrus

8 Administrative Committee, Federal Marketing

9 Order No. 905. Federal Marketing Order No.

10 905 order was promulgated in 1939 and was last

11 amended on September 9th, 2009. The

12 production area for the marketing order is

13 that portion of the State of Florida which is

14 bound by the Suwannee River, the Georgia

15 Border, the Atlantic Ocean, and the Gulf of

16 Mexico.

17 The Citrus Administrative

18 Committee is comprised of 18 members and their

19 alternates. 9 members and alternates are

20 grower members, 8 members and alternates are

21 shipper members, and 1 member and alternate

22 represent the public. All members serve one-

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1 year terms of office that run from August 1st

2 through July 31st. Members may serve a

3 maximum of three consecutive terms. Producer

4 grower members are nominated at grower

5 nomination meetings; handler shipper members

6 are nominated at shipper nomination meetings.

7 The committee nominates a public member and

8 alternate. All members and alternates are

9 appointed by the Secretary of Agriculture and

10 serve at the Secretary's pleasure.

11 Federal Marketing Order No. 905

12 authorizes grade, size, maturity, quality, and

13 volume regulations. Additionally, export

14 regulations including size, capacity, weight,

15 dimensions, marketing or pack of the container

16 regulations is authorized.

17 JUDGE CLIFTON: Now, go back to

18 that. What's typed is marking or pack. How

19 should that sentence read?

20 THE WITNESS: Marking is, or the

21 markings on the container.

22 JUDGE CLIFTON: All right. So,

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1 it's correct exactly as written in the

2 exhibit?

3 THE WITNESS: Yes, ma'am.

4 JUDGE CLIFTON: Thank you.

5 THE WITNESS: Okay. Grade and

6 size regulations are in effect for citrus

7 shipped to destinations outside the production

8 area. Volume regulations may be placed on red

9 grapefruit and specific varieties based on

10 size. Shipping holidays may be authorized

11 during Thanksgiving and Christmas holiday

12 seasons.

13 The authority to establish

14 projects including production research,

15 marketing research and development projects,

16 and marketing promotion including paid

17 advertisement designated to assist, improve or

18 promote the marketing distribution and

19 consumption was included in the order in July

20 of 2009. Under AD, grapefruit imports must be

21 the same or comparable minimum grade, size,

22 quality, and maturity requirements as

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1 specified under the order. The order only

2 regulates interstate and export shipments for

3 the Florida citrus industry.

4 Florida Citrus Commission, Florida

5 Department of Citrus. The Florida Citrus

6 Commission and the Florida Department of

7 Citrus (FDOC) were formed in 1935. The

8 commission is appointed by the Governor of

9 Florida to oversee the FDOC. The commission

10 has 9 members which is made up of 6 growers,

11 2 growers/processors, and 1 grower/shipper.

12 Each commissioner serves a three-year term.

13 The FDOC provides marketing, research, and

14 regulatory support for Florida citrus

15 products. Although it is a state agency, the

16 FDOC operates under a state marketing order

17 which established a means to raise revenue

18 through a tax. Growers fund the FDOC through

19 an excise tax placed on each box of citrus

20 that moves through processing plants and fresh

21 fruit packinghouses. The commission sets the

22 tax rate each year.

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1 During the 2011-12 season, about

2 63 percent of the FDOC's operating budgets,

3 $58 million, is allocated to marketing. With

4 the onset of HLB, citrus greening disease, in

5 Florida, the commission directed 23 percent of

6 the FDOC's budget to disease research. The

7 research money is channeled through the Citrus

8 Research and Development Foundation,

9 Incorporated (CRFD) for disbursement to

10 researchers in the from of competitive grants.

11 There --

12 JUDGE CLIFTON: Excuse me, the

13 initials of that foundation again please?

14 THE WITNESS: CRFD.

15 JUDGE CLIFTON: Okay. It looks to

16 me like your letters are mixed up. If it's

17 Citrus Research and Development Foundation,

18 tell me again what the letters are?

19 THE WITNESS: Okay, I'm sorry.

20 Citrus Research and Development Foundation,

21 Incorporated, CRDF.

22 JUDGE CLIFTON: Very good.

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1 THE WITNESS: Whew!

2 JUDGE CLIFTON: It's the little

3 things.

4 THE WITNESS: Okay. There will be

5 more detailed information presented in later

6 testimony on the FDOC's regulation of

7 intrastate fresh citrus shipments.

8 Florida Department of Agriculture

9 and Consumer Services, Division of Fruit and

10 Vegetables. The Division of Fruit and

11 Vegetables Division operates under the Florida

12 Department of Agriculture and Consumer

13 Services (FDACS) and, through the Bureau of

14 Inspection (Bureau) under the citrus section

15 of the Bureau, inspects and certifies all

16 fresh shipments of Florida citrus as may be

17 assigned or supported in connection with

18 regulations issued under the order and FDOC

19 regulations and/or rules. In support of that

20 goal, licenses for all citrus dealers,

21 registrants and agents of licensed fruit

22 dealers, citrus packinghouses are collected

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1 and maintained annually. The division

2 maintains testing equipment facilities at

3 citrus packinghouses and conducts methods for

4 minimum grade and size regulation as

5 established by the committee under the order.

6 Section 905.53, Inspection and

7 Certification, requires a carton of regulated

8 citrus is inspected, well, it should be

9 requires each. Let me start over.

10 JUDGE CLIFTON: Yes. And I'm

11 going to ask Ms. Bright to make the change

12 that he's saying right on the exhibit if you

13 will. So, yes, read that sentence again

14 please.

15 THE WITNESS: Section 905.53,

16 Inspection and Certification, requires each

17 carton of regulated citrus is inspected by the

18 division. And a certified copy of the

19 manifest is furnished to the committee for the

20 collection of assessments and statistical

21 information, and the committee pays a fee of

22 the manifest information.

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1 Institute of Food and Agricultural

2 Sciences at the University of Florida (IFAS).

3 The Institute of Food and Agricultural

4 Sciences at the University of Florida (UFIFAS)

5 conducts research, extension, and education

6 programs on citrus through its main campus in

7 Gainesville and at three research and

8 education centers at Lake Alfred, Immokalee

9 and Fort Pierce. In addition, a network of

10 multi-county extension faculty is located in

11 various offices throughout the citrus

12 production region. UFIFAS is funded by state

13 appropriation from the Florida legislature

14 through the USDA formula funding and by grants

15 and contracts from a wide range of public and

16 private agencies.

17 The Citrus Research and Education

18 Center (CREC) in Lake Alfred was established

19 in 1917 with grower funds and is the oldest

20 and largest off campus research center in the

21 UFIFAS organization. CREC is unique among

22 citrus centers in that it focuses entirely on

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1 one commodity, citrus. It is the largest --

2 JUDGE CLIFTON: Would you start

3 again with that sentence please?

4 THE WITNESS: CREC is unique among

5 research centers in that it focuses entirely

6 on one commodity,

7 citrus. It is the largest citrus research

8 facility in the world and has the world's

9 largest citrus library. Today, faculty

10 members work to provide relevant time and

11 assistance through the development and

12 delivery of information, technology,

13 educational opportunities to numerous and

14 diverse clients.

15 The University of Florida students

16 pursuing master's degrees and doctorates in

17 agricultural fields may enroll in several

18 courses at CREC or attend via a long distance

19 video conferencing network. Designated

20 extension faculty members serve the public by

21 providing publications and conducting

22 education programs for growers, processors,

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1 packers, related industry groups, and

2 homeowners. Short courses, field

3 demonstrations and seminars are also held at

4 CREC.

5 Eight disciplinary departments of

6 the University of Florida are represented at

7 CREC including horticultural sciences, soil

8 and water science, plant pathology, entomology

9 and nematology, microbiology and cell science,

10 agriculture and biological engineering, food

11 science and human nutrition, and food and

12 resource economics. Faculty are organized in

13 interdisciplinary working groups and address

14 a wide array of topics. In addition, CREC is

15 home to the scientific research staff of the

16 Florida Department of Citrus (FDOC).

17 Agriculture Research Service,

18 United States Department of Agriculture. The

19 United States Department of Agriculture,

20 Agriculture Research Service (USDA-ARS) has a

21 facility located in Fort Pierce. The USDA-ARS

22 unit has been a major player in research

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1 related to both citrus canker and citrus

2 greening. It is formally known as the US

3 Horticultural Research Laboratory (USHRL) with

4 national responsibility for control methods

5 for insect pest of citrus and other

6 subtropical fruits, vegetables and

7 ornamentals, for basic physiological,

8 biochemical, and pathological research on post

9 harvest problems of horticulture crops, and

10 for developing new citrus scion and rootstock

11 varieties that enhance fruit quality and yield

12 and are resistant to disease. There are 20

13 PhD research scientists divided into three

14 units: horticulture and breeding, subtropical

15 insects and subtropical plant pathology.

16 Florida Agricultural Statistics

17 Service. The Florida Agricultural Statistics

18 Service (FASS) is a joint effort of the United

19 States Department of Agriculture National

20 Agricultural Statistics Service (USDA-NASS)

21 and the Florida Department of Agriculture and

22 Consumer Services (FDACS). It is located in

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1 Orlando and collects data on a wide array of

2 crops and livestock products produced in

3 Florida including citrus.

4 The citrus summary is published

5 annually and reports production utilization

6 and prices for all major citrus varieties

7 produced in Florida as well as data on citrus

8 produced in other US states. FASS also

9 publishes biannually commercial citrus tree

10 inventory, another valuable report that

11 provides tree numbers and acreage by age,

12 variety and county. Most of the statistical

13 data used in this hearing was taken from the

14 citrus summary. Also, each box of Florida

15 citrus fruit is assessed a fee to fund FASS.

16 Section 905.31, Duties of Citrus

17 Administrative Committee (G), requires an

18 adequate system for determining the total crop

19 of each variety. The committee and FASS work

20 closely during the season to share statistical

21 data for the Florida citrus industry.

22 Citrus Research and Development

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1 Foundation, Incorporated. The Citrus Research

2 and Development Foundation was created in May

3 of 2009. The foundation exists as a Florida

4 not-for-profit corporation, is organized as a

5 direct support organization (DSO), and is

6 certified by the University of Florida's board

7 of trustees. It operates for the benefit of

8 citrus industry in the State of Florida in a

9 manner consistent with the goals of the

10 University of Florida.

11 The foundation plans to serve as

12 ground zero for Florida's research by

13 coordinating citrus disease researchers,

14 managing contracts, assessing research

15 progress, and addressing intellectual property

16 and other commercialization and product

17 development issues. Ten of the foundation's

18 board members are citrus growers and three

19 represent the University of Florida.

20 Florida Foundation of Seed

21 Producers, Incorporated. The Florida

22 Foundation of Seed Producers, Incorporated

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1 (FFSP) is a non-profit corporation acting on

2 behalf of the Florida Agriculture Experiment

3 Station for the release of proprietary UF

4 germplasm.

5 New Varieties Development and

6 Management Corporation. The New Varieties

7 Development and Management Corporation (NVDMC)

8 is a non-profit organization funded by Florida

9 citrus growers through the Florida Citrus

10 Commission. Its stated mission is to provide

11 Florida citrus growers affordable and timely

12 access to new citrus varieties that will

13 enhance Florida's competitive position and

14 enhance the potential of interstate, domestic,

15 and international breeding programs while

16 maximizing the crop values of the growers and

17 packers it serves. About 70 percent of the

18 NVDMC's budget goes directly to breeding

19 programs. There will be additional testimony

20 concerning the NVDMC presented with testimony

21 on proposal 1 as given.

22 Voluntary Trade Organizations,

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1 Florida Citrus Mutual. Founded in 1948,

2 Florida Citrus Mutual (FCM) serves as a

3 lobbying voice for Florida citrus growers in

4 Washington, DC and Tallahassee Florida. The

5 group which maintains about 8,000 grower

6 members also provides marketing information,

7 communications, and grower fairs to its

8 memberships led by a board of 21 member

9 elected directors from various growing regions

10 across the state. FCM's annual budget is

11 approximately $3,000,000 and is generated on

12 a per box assessment.

13 Regional Grower Associations.

14 Formed at various times over the past three

15 decades, four regional grower associations

16 each handle local issues for their members

17 such as water management, community relations

18 and local planning. Politically active

19 growers in each of the growing regions

20 established the associations after rapid urban

21 development in Florida began conflicting with

22 citrus farming which created the need for more

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1 local representation for the industry. The

2 regional associations subsist on small budgets

3 funded by annual membership fees. Often, the

4 larger citrus organizations use the regional

5 associations as sounding boards for issues or

6 ideas circulating around the industry.

7 The grower member alternates of

8 the CAC that are members of each of the

9 regional associations are as follows: Gulf

10 Citrus Growers Association, Highlands County

11 Citrus Growers Association, Peace River Valley

12 Citrus Growers Association. And each of these

13 above grower associations produces mainly

14 round oranges for processing with some

15 specialty citrus. Members of each of these

16 organizations are grower members of the

17 committee.

18 Indian River Citrus League. The

19 Indian River Citrus League is comprised mostly

20 of fresh grapefruit growers and shippers and

21 is well represented on the committee.

22 Florida Citrus Packers. Chartered

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1 in 1960, the Florida Citrus Packers is a non-

2 profit cooperative association representing

3 growers whose focus is selling their citrus to

4 the fresh market rather than to processors.

5 Fresh growers face unique shipping issues that

6 processed growers do not often face. The

7 packers is supported by a per box assessment

8 on all fresh citrus shipments from committee

9 member companies. Representing the vast

10 majority of the volume of all citrus shipments

11 from Florida each year, the organization

12 endeavors to solve the shipping --

13 JUDGE CLIFTON: Wait, let me have

14 you go back. Read that sentence again

15 beginning with representing.

16 THE WITNESS: Representing the

17 vast majority of the volume of all fresh

18 shipments from Florida each year, the

19 organization endeavors to solve the shipping

20 problems its members encounter and to secure

21 cooperation between producers and shippers in

22 the marketing of fresh citrus. Most of the

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1 shipper members and alternates on the CAC are

2 members of the packers. The packers work

3 closely with the committee on issues involving

4 the shipment of fresh citrus fruit and the

5 majority of the committee's shipper

6 members/alternates are members of the packers.

7 Grower. The number of citrus

8 grower farms in Florida was reported to be

9 6,061 in the 2007 US Census of Agriculture,

10 the most recent data on FASS website. The

11 same census report stated there were 654,747

12 acres of citrus in Florida on those farms.

13 Given the citrus acreage and number of grower

14 farms reported in the 2007 census, the average

15 acreage per grower farm is 172 acres. It

16 should be noted that in the past season, 2011-

17 12, more than 90 percent of the citrus

18 produced in Florida was utilized in the

19 production of fruit juice while less than 10

20 percent was utilized for fresh citrus

21 shipments. Therefore, it is estimated within

22 the industry that approximately 10 percent of

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1 the Florida citrus growers, 500 to 600,

2 produce fruit for the fresh market.

3 A small grower as defined by the

4 Small Business Administration (SBA) is one

5 that grosses less than $750,000 annually, and

6 given the on tree returns and boxes produced

7 per acre as shown on Tables 1, 1-A, 2, 3 and

8 4 gives support that a small Florida citrus

9 grower during the 2011-12 season is one that

10 has approximately 274 acres. Using this as a

11 base for estimating the number of small

12 growers, a case can be made that a majority of

13 Florida's fresh citrus growers would meet the

14 SBA definition. There are a minimum of two

15 grower cooperative member alternates on the

16 committee, and there are an increasing number

17 of growers that own a packinghouse or have an

18 exclusive relationship with a shipper to

19 handle their fruit.

20 Shipper. Over the past ten

21 seasons, the number of Florida citrus shippers

22 that shipped regulated citrus fruit has

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1 declined from 59 shippers during the 2002-03

2 season to 44 shippers during the 2011-12

3 season, a reduction of 25 percent. The Small

4 Business Administration (SBA) definition of a

5 small shipper is a shipper which grosses less

6 than $7,000,000. Given the average FOB price

7 for all Florida's fresh citrus shipments

8 during the 2011-12 season, each shipper

9 shipments, 21 shippers would meet the SBA

10 definition of a small shipper. During the

11 2011-12 season, the ten largest shippers

12 accounted for more than 51 percent of

13 Florida's shipments while the top 23 large

14 shippers (large shippers SBA) accounted for

15 more than 89 percent of the shipments.

16 Also changing is the number of

17 shippers with their own in-house packing

18 sales. 25 years ago, there were only three

19 major sales agencies that marketed fruit for

20 multiple independent shippers. During the

21 2011-12 season, approximately 6 or 25 percent

22 of the larger handlers had their own in-house

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1 sales agencies. Last season, 11 percent of

2 the fresh shipments were handled by 21 small

3 growers (small growers SBA).

4 JUDGE CLIFTON: Now, growers and

5 shippers are different, so tell me how you

6 want that sentence to read starting with last

7 season.

8 THE WITNESS: Okay. Last season,

9 11 percent of the fresh shipments were handled

10 by 21 small shippers (small shippers SBA

11 definition). The consolidation of shippers

12 has been greatest within the marketing

13 cooperatives and mid-size handlers. There are

14 a minimum of two cooperative shipper

15 members/alternates on the committee. Also, of

16 the 44 shippers of record last season, the

17 vast majority, approximately 80 percent, owned

18 and operated groves.

19 Citrus acreage and production.

20 Citrus is grown in 29 of Florida's 67

21 counties. The top 15 citrus producing

22 counties produced 94 percent of the citrus

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1 produced during the 2011-12 season as reported

2 by FASS in the citrus summary 2011-12. There

3 were 531,493 acres of commercial citrus in

4 Florida in 2012 as compared to 797,303 acres -

5 -

6 JUDGE CLIFTON: Now, I think we

7 should change that on the exhibit. So, Ms.

8 Bright, are you going to put a comma instead

9 of a period in Exhibit 9, page 10?

10 MS. BRIGHT: Yes, I will, your

11 Honor.

12 JUDGE CLIFTON: All right. And

13 so, read this again from the beginning, that

14 sentence if you will.

15 THE WITNESS: There were 531,493

16 acres of commercial citrus in Florida in 2012

17 as compared to 797,303 acres of commercial

18 citrus in 2002, a 33 percent reduction.

19 Of the 265,810 acres lost during

20 this ten-year period, 28 percent was orange

21 acreage, 46 percent was grapefruit acreage,

22 and 43 percent was specialty citrus fruit

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1 acreage. During the same time frame, Florida

2 citrus production decreased 32 percent from

3 over 250 million boxes to 171 million boxes.

4 It must be noted that Florida's citrus

5 production during the past season has been

6 greatly impacted by greening. The bearing

7 acreage, production, fresh and processed

8 utilization and on tree prices farm gate for

9 the past ten seasons are listed in Tables 1,

10 1-A, 2, 3 and 4. The sources of the

11 statistical data and definition used in the

12 development, we need to strike "the charts,"

13 it needs to be struck now.

14 JUDGE CLIFTON: Okay. Read us

15 what words should be stricken.

16 THE WITNESS: "The charts."

17 JUDGE CLIFTON: How about the word

18 "and"?

19 THE WITNESS: Yes.

20 JUDGE CLIFTON: Oh, so maybe

21 "charts and." Leave "the."

22 THE WITNESS: Yes, "the charts

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1 and" should be --

2 JUDGE CLIFTON: How about leave

3 the "the" in and just strike "charts and"?

4 THE WITNESS: "Charts and," okay.

5 JUDGE CLIFTON: All right. So,

6 Ms. Bright, tell me what you struck in Exhibit

7 9, page 10.

8 MS. BRIGHT: I have struck out

9 "charts and."

10 JUDGE CLIFTON: Very good. Then

11 if you'd start again and leave that?

12 THE WITNESS: Okay. The sources

13 of the statistical data and definition used to

14 develop the charts are noted --

15 JUDGE CLIFTON: How about the

16 tables?

17 THE WITNESS: I'm sorry, the

18 tables are noted, whoa, let me start again.

19 The sources of the statistical data and

20 definition used to develop the tables are

21 noted, wait a minute.

22 JUDGE CLIFTON: It's perfect.

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1 THE WITNESS: Okay.

2 JUDGE CLIFTON: You're saying,

3 you've got right on the tables.

4 THE WITNESS: Yes.

5 JUDGE CLIFTON: The sources.

6 THE WITNESS: Okay, yes. Yes.

7 JUDGE CLIFTON: So, it's a perfect

8 sentence. Go ahead and read it.

9 THE WITNESS: Okay. The sources

10 of the statistical data and definition used to

11 develop the tables are noted on the tables.

12 The vast majority of citrus produced in

13 Florida is utilized in the production of

14 processed juice products. During the last ten

15 seasons, approximately 90 percent of Florida

16 citrus produced in Florida was utilized in the

17 production of processed products while

18 approximately 10 percent was utilized for

19 fresh shipments.

20 Fresh citrus shipments. Over the

21 past ten seasons, our Florida citrus industry

22 has utilized 3 percent of the orange crop

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1 (includes navel oranges), 39 percent of the

2 grapefruit crop, and 56 percent of the

3 specialty citrus fruit crop for fresh

4 shipments. Round oranges, early mid season,

5 and Valencia oranges accounted for 17 percent

6 of the fresh shipments. Navel oranges

7 averaged 37 percent of the orange shipments,

8 and over 10 percent of the total fresh citrus

9 shipments each season. Grapefruit accounted

10 for 53 percent. And specialty citrus, Temple

11 oranges, tangelos, Fallglo tangerines,

12 Sunburst tangerines, and honey tangerines

13 accounted for 20 percent of fresh shipments.

14 The amount of Florida citrus

15 utilized in fresh channels of trade decreased

16 40 percent from approximately 24.7 million

17 boxes shipped in the 2002-03 season to 14.7

18 million boxes shipped in the 2011-12 season.

19 Given these statistics, it is apparent that

20 the fresh segment of the industry is not the

21 dominant player within the Florida citrus

22 industry. Last season, 2011-12, round oranges

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1 made up 19 percent, navel oranges 11,

2 specialty citrus 20 percent, and grapefruit 50

3 percent of all domestic, which account for all

4 domestic --

5 JUDGE CLIFTON: No, the sentence

6 is good.

7 THE WITNESS: Okay, of which

8 domestic accounted for 38 percent of the

9 grapefruit shipments while 62 percent were

10 exported.

11 JUDGE CLIFTON: Okay. So, after

12 the grapefruit 50 percent, if there's a comma

13 there, then all of us goes -- no, these

14 statistics are only grapefruit, okay. I'm

15 with you.

16 THE WITNESS: Okay.

17 JUDGE CLIFTON: So, go ahead and

18 read it again at that tail end.

19 THE WITNESS: Okay. Last season,

20 2011-12, round oranges made up 19 percent,

21 navel oranges 11 percent, specialty shipments

22 20 percent, and grapefruit 50 percent, of

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1 which domestic accounted for 38 percent of the

2 grapefruit shipments while 62 percent were

3 exported.

4 Each export grapefruit shipments

5 accounted for 30 percent of fresh shipments

6 last season. Last season was chosen as it, in

7 my opinion, represents the current status of

8 the fresh segment of our industry. The

9 shipment of fresh Florida citrus begins in mid

10 to late September when Fallglo tangerines and

11 navel oranges are shipped, followed by

12 grapefruit shipments in October. By the first

13 of November, all fresh fruit packinghouses are

14 up and shipping fruit.

15 Fresh fruit shipments peak the

16 second week of December. By mid January,

17 early tangerines, Fallglo and Sunburst, navel

18 oranges and tangelo shipments are ending up.

19 Offshore export of grapefruit is heaviest from

20 mid January to the end of March. Honey

21 tangerines and Valencia orange shipments begin

22 in mid February. The fresh fruit season is 95

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1 percent complete by the end of April with

2 Valencia oranges shipped through June.

3 Most of the citrus designated for

4 fresh utilization is harvested and packed

5 within two days and is shipped within four to

6 six days. However, in the late spring, there

7 are some Valencia oranges placed in cold

8 storage to be marketed during the summer

9 months. Therefore, Florida citrus is in the

10 fresh channel of trade approximately nine to

11 ten months each year.

12 The market for fresh Florida

13 citrus extends beyond the borders of the

14 United States. Last season, 67 percent of

15 Florida's fresh shipments went to the United

16 States, 17 percent to the Pacific Rim

17 countries, 10 percent to Europe, and the

18 remaining 6 percent to Canada. It must be

19 noted that on October 14th, 2010, the USDA-

20 APHIS published the fresh fruit shipment

21 procedures for the shipment of all fresh

22 citrus from Florida. This rule has since been

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1 revised as needed to combat pest and disease

2 that are affecting the shipment of fresh

3 Florida shipment.

4 MR. HILL: Can I stop him for one

5 second? Just to correct the word "reaming" as

6 far as last season.

7 THE WITNESS: Oh.

8 JUDGE CLIFTON: I'd like Ms.

9 Bright to make that change on page 11 of

10 Exhibit 9, the word "reaming" will be changed

11 to "remaining" 6 percent. I think spell check

12 did that.

13 THE WITNESS: Yes.

14 JUDGE CLIFTON: And there's one

15 other change I think we should make. It's the

16 line above where it talks about the market

17 extending beyond the "boarders" of the United

18 States. Let's just take out the a in the word

19 boarders. And do you agree with those

20 changes, Mr. Chadwell?

21 THE WITNESS: Yes.

22 JUDGE CLIFTON: All right. You

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1 may resume.

2 THE WITNESS: Okay. Cost of

3 production and grower returns. In September

4 of 2012, Ron Muraro, Professor of the

5 Extension Farm Management Economics,

6 University of Florida, IFAS CREC, published

7 information on production costs for producing

8 oranges and grapefruit in the production

9 areas.

10 JUDGE CLIFTON: Let's go off

11 record just a minute.

12 (Off the record.)

13 JUDGE CLIFTON: All right. We're

14 back on record. It's 10:57. First, I'm going

15 to ask, Mr. Chadwell, that you instruct

16 Kathleen Bright, on the bottom of page 11 of

17 Exhibit 9, what word needs to be added?

18 THE WITNESS: Of Florida.

19 Production areas of, just Florida needs to be

20 added.

21 JUDGE CLIFTON: Okay. And now

22 would you read that sentence again please?

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1 THE WITNESS: In September of

2 2012, Ron Muraro, Professor of the Extension

3 Farm Management Economics, University of

4 Florida, IFAS CREC, published information on

5 production costs for producing oranges and

6 grapefruit in the production areas of Florida.

7 JUDGE CLIFTON: Oh, I see. Then

8 that sentence is repeated on the next page.

9 So, no problem. Go ahead and just read it

10 again, we'll leave it in there. It's not a

11 problem.

12 THE WITNESS: Word process. In

13 September of 2012, Ron Muraro, Professor of

14 the Extension Farm Management Economics,

15 University of Florida, IFAS CREC, published

16 information on production costs for producing

17 oranges and grapefruit in the production areas

18 of Florida. He reported that eight seasons

19 ago the average cost of citrus production in

20 Florida averaged $771 per acre. For the 2011-

21 12 season, Mr. Muraro reported the cost of

22 producing oranges for processed market, 98

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1 percent of oranges used for processing was

2 $2,370. This cost could be as much as 20

3 percent more for oranges produced for the

4 fresh market.

5 It should be assumed the cost of

6 producing specialty citrus for the fresh

7 market would be similar to the cost to produce

8 grapefruit for the fresh market. The cost to

9 produce grapefruit for the fresh market was

10 $2,935 per acre, and these costs have

11 increased greatly due to canker, greening,

12 increased energy cost which affects not only

13 production cost but also harvesting and

14 packing of citrus for the fresh market.

15 JUDGE CLIFTON: Thank you. Let me

16 stop you there. Ms. Bright, on page 12 of

17 Exhibit 9, would you insert the word "market"?

18 And that's how the witness read it, so that

19 word market goes just before the phrase "was

20 $2,935 per acre."

21 MS. BRIGHT: Got you.

22 JUDGE CLIFTON: All right, thank

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1 you. You may resume, Mr. Chadwell.

2 THE WITNESS: Whew, okay.

3 JUDGE CLIFTON: With the cost of

4 producing citrus in Florida.

5 THE WITNESS: The cost of

6 producing citrus in Florida continues to

7 increase as the cost to combat the spread of

8 citrus canker and greening. These two

9 diseases will be discussed later in my

10 testimony. Also, the loss of trees and very

11 limited supply of replacement trees available

12 for growers to reset their groves is adding to

13 the cost of each box of citrus produced. As

14 more trees are lost to these diseases, it is

15 becoming very difficult for Florida growers to

16 cover the cost of production.

17 Grower returns over the past ten

18 seasons have gone from below the cost of

19 production for some varieties to some of the

20 highest returns on record. Some of the

21 highest returns were during the three previous

22 seasons when demand was greater than supply,

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1 and during the 2004-2005 and the 2005-2006

2 seasons caused by the hurricanes in 2004 and

3 2005, coupled with the reduced supply of navel

4 oranges from California. However, given the

5 projected decrease in citrus production from

6 Florida for the next five seasons or more and

7 the rising cost of production, it will become

8 much more difficult for growers to cover their

9 costs in the upcoming seasons. For growers,

10 producing navel oranges, grapefruit, tangelos,

11 early tangerines, and honey tangerines for the

12 fresh market is their only viable option as

13 the on tree prices they receive for the

14 portion of their crop that is utilized for

15 processing will not cover their cost of

16 production.

17 I have a PowerPoint presentation

18 that will go in more detail. There are two

19 major diseases, canker and greening, that are

20 having a devastating effect on Florida citrus

21 crops. Citrus canker is a bacterial disease

22 that affects fruits, leaves and stems.

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1 Unsightly lesions caused by this disease

2 result in fruit not sellable in fresh markets.

3 Greening, sometimes called HLB, is

4 considered by many to be the most devastating

5 citrus disease. This disease causes a serious

6 and rapid decline in citrus trees that is

7 impossible to contain once it has become

8 established in a planting. Tree health and

9 crop quality are profoundly affected.

10 Both of these diseases are adding

11 additional costs to production, harvesting and

12 packing of Florida citrus products for the

13 fresh market. These two diseases are the

14 greatest threat to the viability of Florida

15 citrus industry, and finding a cure for these

16 diseases must be put on the fast track or

17 there may not be a citrus industry in Florida

18 within five seasons. Florida has supplied

19 fresh citrus to consumers for over a hundred

20 years, and I believe there will be a citrus

21 industry in Florida, research and market

22 development will play an important role in the

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1 survival of our industry.

2 JUDGE CLIFTON: Thank you, Mr.

3 Chadwell. I think this would be a good time

4 for a ten-minute break. And then we'll go on

5 to what you have for us next. So, please be

6 back and ready to go at 11:15. 11:15, thank

7 you.

8 (Short recess.)

9 JUDGE CLIFTON: All right. We're

10 back on record at 11:22. Mr. Chadwell?

11 THE WITNESS: I'd like to present

12 a short PowerPoint on some --

13 MS. BRIGHT: Excuse me, your

14 Honor. Can I interject?

15 JUDGE CLIFTON: Oh, yes. I'm

16 sorry.

17 MS. BRIGHT: That's okay.

18 JUDGE CLIFTON: You wanted to

19 clarify something?

20 MS. BRIGHT: I wanted a

21 clarification on Mr. Chadwell from his

22 testimony, and I'm going to refer you back to

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1 page 8 of your testimony.

2 JUDGE CLIFTON: All right, this is

3 Exhibit 9.

4 MS. BRIGHT: On page 8 of your

5 testimony, the third sentence from the bottom,

6 when you read it into the record, you said

7 "while less than 10 percent was utilized for

8 fresh citrus shipments," did you mean "while

9 less than 9 percent"?

10 THE WITNESS: Yes, it should have

11 been less than --

12 MS. BRIGHT: 9 percent.

13 THE WITNESS: It was 9 percent,

14 yes, and --

15 MS. BRIGHT: And 10 percent for

16 the next one?

17 THE WITNESS: Yes.

18 MS. BRIGHT: Correct, I just want

19 to make sure that's on properly. Thank you.

20 JUDGE CLIFTON: Thank you, Ms.

21 Bright. So, the exhibit is fine and the

22 testimony is now clarified.

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1 All right, Mr. Chadwell, the

2 PowerPoint. So, you've provided the slides.

3 They've been marked as Exhibit 10. And you

4 have equipment here, laptop, projector.

5 Everyone who would like to reposition so you

6 can see better, please do.

7 All right. And do you have a

8 helper? Oh, you can do control it from the

9 witness stand?

10 THE WITNESS: Electronically. I

11 hope, that's the plan.

12 JUDGE CLIFTON: Excellent. And if

13 you need to move, feel free to as long as

14 you're near a microphone.

15 THE WITNESS: Okay.

16 JUDGE CLIFTON: All right. You

17 may proceed.

18 THE WITNESS: Public Hearing

19 Marketing Order 905. Florida citrus

20 varieties, just to reiterate, round oranges,

21 early mid season and Valencia oranges, red and

22 white grapefruit, specialty citrus includes

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1 Fallglo tangerines, Sunburst, tangelos and

2 honey Ts.

3 I wanted to put this picture in as

4 this is what we were discussing, the 2002-2003

5 season. This is what we as an industry

6 envision a citrus grove to look like.

7 Production and shipment from the

8 previous picture for the 2002-2003. Total

9 citrus production was 250,850,000 boxes.

10 Fresh utilization was 24.7 million boxes, 10

11 percent; processed utilization, 226.15 million

12 boxes, 90 percent. Round oranges made up 79

13 percent of the total crop, 2 percent for fresh

14 utilization, and accounted for 13 percent of

15 fresh shipments. Navel oranges, red and white

16 grapefruit, specialty citrus were 21 percent

17 of the crop but made up 87 percent of the

18 fresh shipments.

19 This is, unfortunately, kind of

20 what we see in groves today. We have trees

21 that have been completely removed, reset,

22 trees of one to two years old inter-dispersed

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1 between mature trees.

2 We move forward. For production

3 and shipments for last season, total

4 production was 170.9 million boxes. Fresh

5 utilization was 14.7 million boxes or 9

6 percent of the production. Processed

7 utilization, 156.2 million boxes or 91 percent

8 of the production. Round oranges were 81

9 percent of the crop, 2 percent fresh

10 utilization and 19 percent of fresh shipments.

11 Navel oranges, red and white grapefruit,

12 specialty citrus, 13 percent of our crop, 81

13 percent of our fresh shipments.

14 A quick comparison to the 2002-

15 2003 season compared to last season, the 2011-

16 12 citrus crop. Total Florida citrus crop

17 down 32 percent; fresh shipments down 40

18 percent; round orange production down 27

19 percent; navels, red and white grapefruit and

20 specialty citrus production down 50 percent.

21 And there again is just another

22 view of what we have today. And that's what's

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1 producing the crop we are currently in, the

2 production and shipments for the 2012-13

3 season. The October 2012 estimate was 179.9

4 million boxes which was up 5 percent from the

5 2011-12 season's production. In April 2013,

6 the estimate was 159.5 million boxes, 11

7 percent below the October estimate, and 7

8 percent below the 2011-12 season's harvest.

9 And the estimated shipments for this season

10 are estimated to be 13.2 million boxes, 10

11 percent below the 2011-12 season.

12 As a point, how our fresh industry

13 has reacted, in the 1987-88 season, specialty

14 acreage was 26,300 acres. In the 1997-98

15 season, specialty citrus acreage was 45,900

16 acres, a 74 percent increase in ten seasons

17 with new varieties, Fallglo and Sunburst

18 tangerines. Move to last season, the 2011-12

19 season, specialty, 16,200 acres, disease and

20 outdated varieties, and were down 35 percent.

21 Moving forward, putting the tools

22 in the Florida citrus growers' toolbox, that's

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1 a term that we utilize here in our industry a

2 lot, is the tool things that can help our

3 growers to grow, market, harvest their fruit,

4 adapting organizations to fresh fruit grower

5 needs. As part of what this whole marketing

6 order and amendments we are proceeding is

7 adapting our order more toward the fresh needs

8 of Florida fresh fruit growers; continued

9 research to solve disease problems is going to

10 be paramount; development of new varieties and

11 hybrids; and to promote the Florida fresh

12 citrus industry. These are how we are going

13 to move forward from where we are now where it

14 looks pretty bleak. These are the tools and

15 what is happening within our industry for us

16 to help ourselves and move forward so that we

17 can get back to having groves that look like

18 the one represented here.

19 And I'll entertain any questions.

20 JUDGE CLIFTON: Mr. Hill, would

21 you like to begin?

22 MR. HILL: I'm going to let Ms.

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1 Schmaedick go first.

2 JUDGE CLIFTON: All right. Ms.

3 Schmaedick?

4 EXAMINATION

5 BY MS. SCHMAEDICK:

6 Q Thank you, Mr. Chadwell, for your

7 testimony and your presentation. This is

8 Melissa Schmaedick from USDA.

9 I'd like to begin with just asking

10 for a clarification on your PowerPoint

11 presentation.

12 A Okay.

13 Q If you could go to the slide that

14 is titled Production and Shipments, 2012-13

15 Season? Yes, that's the one.

16 A Okay.

17 Q So, could you explain what caused

18 the slightly higher increase of an estimate?

19 You said the estimate was up.

20 A Yes. The NASS, Florida

21 Agricultural Statistics Service in cooperation

22 with the USD NASS, in October, around the 10th

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1 of October each year, projects the Florida

2 citrus crop using the data on tree numbers,

3 tree sizes, and past history. And in October,

4 when the estimate was presented, it was for

5 179.9 million boxes which was up 5 percent

6 from where we were the previous season.

7 Subsequent to that, and they update their

8 estimate every month during the season, and so

9 the most current estimate was on or about the

10 10th of April. And that estimate had gone

11 from 179.9 million boxes to 159.5 million

12 boxes which is an 11 percent decrease.

13 Numerous reasons, but the effects

14 of greening have been paramount this season,

15 even though we've had greening for a number of

16 years. It seems that this season it

17 manifested itself the most with premature

18 fruit drop. So, the fruit was on the trees

19 when they measured in July and August and

20 September for the crop estimate, but

21 subsequent to that with the effects of

22 greening, dry weather or climatic conditions,

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1 and it started in December and each months

2 subsequently there leading up to April, there

3 was a reduction in the crop because of the

4 effects of greening. And that was really

5 pronounced in the droppage of fruit, fruit

6 dropping off the trees, and therefore, not

7 harvestable.

8 So, the fruit was in place in

9 October but has dropped off the trees until

10 now. And so, that's an 11 percent. And we

11 have an estimate coming up again in May and in

12 June, and there is anticipation that it could

13 be further reduced.

14 Q Thank you. And when a tree is

15 impacted by this disease and it drops fruit,

16 does that also impact the future yield of

17 fruit from that particular tree or is it just

18 for the specific crop?

19 A That would be for the specific

20 crop. And so, what the industry's concern is

21 that this is the first year with greening that

22 we have noticed pronounced drop of fruit. But

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1 that is symptomatic of the disease, but it is

2 just massing itself such that we are starting

3 to see the effects in greater percentages of

4 fruit drop.

5 Q Thank you. I'd like to turn to

6 your written testimony, that would be Exhibit

7 No. 9. And I'll just sort of start from the

8 beginning and go through on the points that

9 I've made some notes to myself.

10 A Okay.

11 Q So, on page 2 of your testimony,

12 you state at the end of the first paragraph,

13 and I'll read the sentence, it says, "The

14 order only regulates interstate and export

15 shipments for the Florida citrus industry."

16 Could you clarify which organization currently

17 regulates intrastate?

18 A Yes. Currently, the Florida

19 Department of Citrus, under Chapter 20 of

20 Florida Department of Citrus rules, is the

21 authorizing body that regulates intrastate

22 shipments.

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1 Q Is there a close working

2 relationship between the order and that

3 organization?

4 A Yes, there is. In fact, we've got

5 commissioners that serve on the, Florida

6 Citrus commissioners are members of the

7 committee and vice versa, yes, but there is a

8 close working relationship.

9 Q Thank you. On page 3 of your

10 testimony and then further on throughout the

11 document, when you refer to specific sections,

12 so the example on page 3 would be about two-

13 thirds the way through, that last paragraph,

14 you say Section 905.53, is that section from

15 the marketing order?

16 A Yes, it is.

17 Q And referring to that last

18 sentence of that paragraph that begins with

19 Section 905.53, could you clarify whether or

20 not the collection of assessments occurs at

21 the handler level or the grower level?

22 A Yes. Inspection is required under

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1 905.53 in the order. The inspection is

2 delegated to the Florida Department of

3 Agriculture Consumer Services in cooperation

4 with the USDA. And so, they inspect each lot

5 for the regulated citrus per the order,

6 regulated interstate and export shipments.

7 And that data, and so when it's inspected,

8 then they certify it on a manifest and then

9 those numbers are what we derive as, and it's

10 on the manifest, it specifies what is

11 interstate shipment, what is export, and

12 certifies the number of cartons that are put

13 in to that channel of trade.

14 And then that is how shippers

15 derive, that is what we use, of certified

16 regulated shipments, to assess the shippers

17 the assessment that they pay but the growers,

18 it's taken from their growers' returns but

19 paid by the handler. And we provide them with

20 that number of, a certified number each month.

21 Q Thank you. On page 5 of your

22 testimony, in the first paragraph, you refer

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1 to something called ornamentals. Could you

2 explain what ornamentals are? It's in the

3 middle of that first paragraph.

4 A Oh, okay. Within Florida, some of

5 our major crops, in addition to citrus fruit

6 crops and other crops such as avocados and

7 then vegetables, peppers, tomatoes and

8 ornamentals or ornamental horticultural

9 fruits. I meant shrubs, trees, landscaping

10 material. And so, that's an integral part of

11 Florida's agricultural base are ornamentals

12 and we've referred to those but those are

13 basically landscape plants and trees.

14 Q Okay, thank you. On page 6, the

15 paragraph under the heading New Varieties

16 Development and Management Corporation, about

17 halfway down through that paragraph, you state

18 that the mission statement of the NVDMC is to

19 provide Florida growers affordable and timely

20 access to new citrus varieties that will

21 enhance Florida's competitive position. My

22 question for you is when you state competitive

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1 position, is that through control of the

2 disease that you spoke of and increasing

3 production? Or could you explain what it

4 means?

5 A This is, when we talk about

6 competitive, is developing new varieties and

7 hybrids that are consumer friendly, easy to

8 peel, seedless, and those varieties as was

9 presented in the testimony previously, how

10 Florida's tangerine production has shifted.

11 Some varieties are no longer in commercial

12 production, and the ones that are have been

13 waning, whereas California has developed some

14 new varieties that are easy peel, seedless.

15 And so, we in Florida, with a different type

16 of climate, are trying to develop varieties

17 that the Florida grower can produce and the

18 shipper to compete with like varieties that

19 are being produced in California and other

20 places in the world.

21 Q Would the control of disease

22 through development help the competitive

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1 position though in any way? Or do you see

2 them as being separate?

3 A Well, we've got to solve our

4 disease problem, greening, before we can move

5 forward on any of the varieties because as we

6 sit now, greening is affecting all of our

7 varieties. And so, even with new varieties,

8 and hopefully it will be addressed later,

9 there may be greening resistance brought into

10 those varieties, but we've got to solve our

11 disease problems so that we can move forward

12 with new varieties and hybrids.

13 Q Thank you. On page 7 of your

14 testimony under Regional Grower Associations,

15 were the proposals being presented today

16 discussed with these regional grower

17 association groups?

18 A Yes. As I stated, each of these

19 regional growers, there are members on the

20 committee that are on the board of directors

21 actively involved in each of these grower

22 associations. And testimony will be presented

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1 and we have supporting documents/positions

2 from some of these, as I mentioned, the Indian

3 River Citrus League is a predominantly fresh-

4 oriented region where they produce fresh

5 grapefruit, and Florida Citrus Mutual

6 represents all citrus growers. And we have

7 letters of support from those, and the Florida

8 Citrus Packers, that will be presented later.

9 Q Thank you. Would you, in your

10 opinion, were these proposals then widely

11 discussed as well as supported by the industry

12 at large?

13 A Yes. This has been an ongoing

14 process which began back in 2010. So, we've

15 had almost two years of discussing these, and

16 so, yes, the industry has been very well

17 informed of what we're doing and the process

18 we're going through.

19 Q And during that process, have you

20 also examined other alternatives?

21 A Yes, we did other alternatives.

22 Yes.

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1 Q Thank you. On page 8 of your

2 testimony under the heading Florida Citrus

3 Packers, you state that fresh growers face

4 unique shipping issues that processed growers

5 do not often face. Could you give me some

6 examples of what those are?

7 A Yes. Fresh growers, for an

8 example, there are certain diseases that

9 affect the exterior of the fruit that for

10 processing would not be as much of a concern.

11 But blemishes on fresh fruit would lower the

12 grade or, to some cases, they would not even

13 meet grade so they could not be shipped. So,

14 there are diseases that affect the Florida

15 grower and shipper that the processed grower

16 does not face in producing for the processed

17 orange market.

18 Q Thank you. On page 9 of your

19 testimony, you identify, I believe it's 274

20 acres as sort of, my question is, is that a

21 benchmark that you're using to identify small

22 producers?

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1 A Yes, according to the $750,000.

2 And then we looked, you can go back through

3 many but I just used last year's on tree fresh

4 returns to come up with how many acres it

5 would take to meet that threshold. So, it was

6 a purely statistical-driven number.

7 Q Okay, thank you. And you

8 mentioned two cooperative grower members. Are

9 there cooperatives in the Florida citrus

10 industry?

11 A Yes, there are grower-owned

12 cooperatives in the Florida citrus industry.

13 And now there currently, there are two major

14 ones, and they each have membership of other

15 cooperatives as our industry, our fresh

16 industry has changed and shrunk, for lack of

17 a better term. It became where the

18 cooperatives that owned their own

19 packinghouse, it just got inefficient, so they

20 closed their packinghouses and became members

21 of other cooperatives. So, each of our two

22 major cooperatives have a number of other

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1 cooperatives as membership in their

2 cooperatives.

3 Q Do you have an idea for what

4 percentage of the industry is represented by

5 cooperatives?

6 A I would suggest that right now it

7 would be probably 15 to 20 percent of the

8 fresh shipments. It's changing so rapidly, I

9 would have said three or four years ago it

10 would have been 20 plus percent. If you look

11 at currently, it may be down in the 10 to 15

12 percent range.

13 Q Thank you. At several points in

14 your testimony, you refer separately to

15 oranges and then navel oranges. Can you

16 explain to me --

17 A What I was trying to do is, our

18 industry is, in layman's term, is a processed

19 industry. Over 90 percent of the fruit

20 produced is for processed, and the greatest

21 percentage of that, round oranges. And when

22 I talk about round oranges, I tried to

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1 differentiate them, round oranges are the

2 early mid season and the Valencia varieties

3 where approximately 98 percent of their

4 production is used for processed product and

5 only 2 percent of their production is for

6 fresh. In that fresh, it's only about, it

7 ranges from 13 to maybe 18 percent of total

8 fresh shipments.

9 So, what we've tried to do as a

10 fresh industry is kind of removed them from

11 the discussion because it taints statistics

12 because they're such a big brother in the

13 room. And navel oranges which get grouped

14 with round oranges, navel oranges have the

15 vast majority, I'm going to say over 80

16 percent of their production is for fresh

17 shipments, less than 20 percent for processed.

18 So, we've termed them as a fresh variety

19 because a grower could not stay in business

20 producing navel oranges if their only outlet

21 was processed, because many times that's a

22 negative return to the grower on tree.

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1 And then the grapefruit, red and

2 white grapefruit as well as your tangerines,

3 early tangerines and honey tangerines, those

4 varieties in numerous seasons have, especially

5 for tangerines, negative returns for processed

6 to the on tree, grapefruit are different, but

7 those are predominantly fresh oriented. The

8 producers of those varieties, navel oranges,

9 red and white grapefruit, and your tangerine

10 varieties are dependent on the fresh shipment

11 of those, the fresh market to return them a

12 positive return. They could not stay in

13 business just on processed returns for those

14 varieties.

15 Q Thank you. Is it typical for a

16 grower to grow a mix of, let's say navel

17 oranges and grapefruits and tangerines? Or do

18 they just specialize in one type of fruit?

19 A There are, the largest percentage

20 of growers in Florida produce round oranges,

21 early mid season, Valencia oranges for the

22 processed market and have no fresh fruit at

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1 all. And that's the vast majority of growers.

2 Those growers that produce naval oranges, red

3 and white grapefruit, and specialty are for

4 fresh. However, most of those would also

5 produce some round oranges.

6 Q So, to clarify, a grower who

7 produces mainly for the fresh market would

8 have in his production oranges, grapefruits,

9 tangerines?

10 A Yes.

11 Q And not just grapefruit, for

12 example, they wouldn't just specialize in

13 grapefruit?

14 A Except for the Indian River

15 district. We have a district that is the

16 predominant production of grapefruit, the

17 Indian River citrus district. And they, over

18 there it's not uncommon for a grower to only

19 be a grapefruit grower. But it's also not

20 uncommon for them to have some other specialty

21 fruit or some round oranges.

22 Q Okay, thank you. On page 12 of

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1 your testimony, you state that the supply of

2 replacement trees is limited. Can you explain

3 why the supply is limited?

4 A Yes. With the onset of diseases,

5 historically, reset trees were grown outside.

6 In other words, they were grown in field

7 conditions. In the last few years, all

8 replacement trees have to be grown inside, and

9 so that has just limited the number of

10 nurseries, limited the number of trees. And

11 so, the supply chain has somewhat been shrunk

12 down because of the requirements on how they

13 must produce trees.

14 Q And when you say reset trees, what

15 does that mean?

16 A A reset is what we term, in our

17 industry is a small tree that has been budded

18 to whatever variety and then is transplanted

19 into the grove. And so, it's like in the

20 pictures that I've shown, you'll have where

21 trees are removed, we call it a reset, we

22 bring a new tree and put it in the ground to

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1 replace the trees that were taken out.

2 Q Thank you for that clarification.

3 MS. SCHMAEDICK: I believe that

4 concludes my questions. Thank you.

5 THE WITNESS: Okay.

6 JUDGE CLIFTON: Does anyone else

7 from USDA have questions for this witness?

8 MR. HILL: Yes, I do have a

9 couple.

10 JUDGE CLIFTON: Mr. Hill?

11 EXAMINATION

12 BY MR. HILL:

13 Q In your Exhibit 10 which is the

14 PowerPoint that you gave us, there's a page

15 that says "How our fresh industry has

16 reacted." Question, you mentioned something

17 about outdated varieties. Could you kind of

18 give me a rundown on what you mean by that?

19 A Yes. What I was trying to present

20 in pretty graphic terms so to speak is that

21 we've had a number, if you go back 30-40

22 years, we had a very prominent, two prominent

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1 varieties that would be called fresh fruit, it

2 would be Temple oranges and Dancy tangerines

3 which at this point we do not even regulate

4 Dancy's because they're not commercial viable.

5 Temples are shortly going to be not

6 commercially viable, they are down. And so,

7 we've had varieties that were very prominent

8 that are no longer being produced. When that

9 trend started, our industry has been

10 successful with the Fallglo and Sunburst

11 tangerines, and they came in and filled the

12 void. Subsequently, in that ten-year period,

13 we saw such an increase in those acreage.

14 Subsequent to that, between

15 diseases and those varieties which maybe not

16 as easily peeled and have a number of seeds,

17 with the onset of easy-peel seedless variety,

18 they have fallen out of favor, for lack of a

19 better term, with the consumer. And so, what

20 was I was trying to show is that's what's

21 happened. We've had this, it's showing that

22 our industry, when we have a promising new

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1 variety, how we are quick to react to that

2 variety and move forward. And I just tried to

3 show that we were at a point where we needed

4 some new varieties, Fallglo and Sunburst came

5 in, production and shipments went up, through

6 diseases and then them falling out, you know,

7 we've lost our production.

8 Q So, and on Exhibit 9, page 9, you

9 mention shippers, Florida citrus shippers

10 diminishing from 59 to 44 over a period of

11 time.

12 A Yes.

13 Q Would this be one of the reasons

14 why?

15 A Yes. You're correct. I think it

16 was, we used a ten-year period and these are

17 shippers of regulated varieties, there were 59

18 in 2002-2003, in the last year 44. And that

19 reduction has been a reduction of acreage, the

20 dropping out of some varieties, and then of

21 course disease. And so, we're at a, I

22 wouldn't say a low but we are at a lower ebb

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1 where we don't have, we're in need of some new

2 varieties to gain consumer acceptance.

3 Q And so, to your knowledge, have

4 other areas that produce this type of citrus

5 outside of Florida have had the same problems

6 with the greening and so forth?

7 A Greening is prevalent in Florida.

8 It has, if I'm not mistaken, they have found

9 greening in Texas. I don't know if they found

10 it in California --

11 MR. HAMNER: They're found in

12 California.

13 THE WITNESS: California, too.

14 JUDGE CLIFTON: Let me just, for

15 the record, have the clarification identified.

16 Tell me who you are and what you just said.

17 MR. HAMNER: I was only prompting

18 the witness.

19 JUDGE CLIFTON: I know. Prompting

20 counts here.

21 MR. HAMNER: My name is George F.

22 Hamner, Jr. I'm a grower/shipper in Florida.

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1 In Texas, they found a small amount. In

2 California they found one tree so far of

3 greening. So, greening in the United States

4 is predominantly in Florida now, but all

5 citrus producing areas are worried about it.

6 JUDGE CLIFTON: Thank you.

7 BY MR. HILL:

8 Q And I guess my question is it

9 hasn't really hit those other areas like it's

10 hitting Florida, would that be a fair

11 statement?

12 A That's a fair statement.

13 MR. HILL: I don't have any more

14 questions at this time.

15 JUDGE CLIFTON: Ms. Schmaedick?

16 EXAMINATION

17 BY MS. SCHMAEDICK:

18 Q This is Melissa Schmaedick. Mr.

19 Chadwell, you used the term commercially

20 viable. Could you expand on that concept a

21 little bit? What makes a variety commercial

22 viable? Is there a threshold?

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1 A There is not. I'm talking about

2 the Citrus Administrative Committee, when we

3 deregulated, took out of the order those

4 varieties, we did not have a defined number

5 per se. It just got that their volume had

6 decreased to, I think in most cases under

7 50,000 cartons. And so, it had come from at

8 one point over a million cartons, but it just

9 got to where they became such a small

10 percentage and they were being phased out.

11 And so, production had dropped and shipments

12 were dropping, and so we just deregulated

13 those because of what we termed that they were

14 probably going to be used more locally

15 intrastate because of their just lack of

16 production.

17 Q Looking at sort of a reverse

18 trend, at what point would you decide that a

19 variety, perhaps a new variety, has become

20 commercially viable? And then, and what would

21 you do if a variety reached that point?

22 A I think at this point, I'm

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1 assuming, we're hoping that we get some new

2 varieties. And I think it is a pretty

3 common thinking within our industry that where

4 we had varieties that may be extended to the

5 three months in a harvesting situation, that

6 we may have multiple new varieties with a

7 shorter production time frame. And we may be

8 moving, transitioning from an industry of

9 fresh shipments where we had millions of

10 cartons to where we very likely could have

11 some multiple new varieties in smaller

12 quantities that may end up being a 200,000 to

13 400,000 carton variety in a short window of

14 time.

15 So, that is something that we have

16 not addressed yet but as these new varieties

17 come into production and we start seeing their

18 shipping pattern, we as an industry will have

19 to consider where they're being shipped, the

20 volumes and the time frame. But I think it's

21 pretty much a given that we think that there

22 are going to be multiple varieties but smaller

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1 production in a smaller window of shipment.

2 So, what we considered maybe when we had 70

3 million cartons being shipped and 50,000

4 cartons for a variety not being commercial

5 viable where we're an industry with 25 to 26

6 million cartons, you know, those numbers are

7 going to be, maybe we'll take a closer look

8 at. But I think going forward, those are some

9 issues that the committee will have to

10 address, but we know that that's going to be

11 some questions asked.

12 MS. SCHMAEDICK: Thank you.

13 That's it for me.

14 JUDGE CLIFTON: Yes, Mr.

15 McFetridge?

16 EXAMINATION

17 BY MR. McFETRIDGE:

18 Q Marc McFetridge, USDA. I just

19 have a couple of quick questions. I know

20 you've stated that the Florida citrus industry

21 as a whole has seen decline in the last five

22 years, and you've specified, you know, disease

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1 and then some of the varieties losing favor

2 with consumers. Has there been any

3 international competitors that have come on

4 the scene in the last ten years that have kind

5 of taken some of the market share away from

6 Florida?

7 A Yes, there has been an increase in

8 offshore imports of specialty varieties or

9 clementines from Spain, South Africa, I guess

10 Israel. You know, so we have seen a great

11 increase in those which has prompted

12 California which has more like growing

13 conditions to start producing those varieties.

14 And if you look at California, it was Valencia

15 and navel orange industry with very limited

16 specialty fruit or tangerine varieties. And

17 this is off the top of my head, their

18 expansion in the last ten years has been

19 pronounced in the amount of specialty fruit

20 that they are producing to fill not only the

21 lack of our fruit in the market but also to

22 counteract the imports that are coming in.

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1 Q On another topic, talking about

2 the diseases, the canker and the greening,

3 when that's observed in the groves, what type

4 of measures do you see the growers doing?

5 Would they have to completely remove a tree

6 when this is spotted that they completely

7 quarantine it? What type of measures are, and

8 feel free if you'd like me to hold my

9 questions and defer to another person.

10 JUDGE CLIFTON: He needs his coach

11 again.

12 MR. HAMNER: This is George

13 Hamner, Florida citrus grower. We do have

14 processes that's usually seen on the outside

15 of the grove. Initially, we were removing

16 trees. Now we are not, we're simply treating

17 the area to try and reduce the population of

18 the psyllid which is the bug that spreads the

19 disease throughout the groves. There are also

20 some serious plans or plans in the works now

21 for nutritionals to help beef up the strength

22 of the tree, maybe masking the symptoms but

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1 overcoming the symptom itself. So, we've made

2 a huge amount of progress on it but we're not

3 removing trees, no.

4 JUDGE CLIFTON: What's the word

5 you used that is the bug?

6 MR. HAMNER: It's called a

7 psyllid, it's p-y-s-i-l-l-i-d. P-s-y, sorry,

8 p-s-y-l-l-i-d, psyllid.

9 JUDGE CLIFTON: P-s-y, what comes

10 next? P-s-y?

11 MR. HAMNER: Yes, p-s-y-l-l-i-d,

12 psyllid.

13 JUDGE CLIFTON: Psyllid.

14 MR. HAMNER: It's a nasty little

15 booger.

16 JUDGE CLIFTON: And how are you

17 spelling booger?

18 MR. McFETRIDGE: And so, is this

19 insect, is this native or is this something

20 that's been brought over from another country?

21 MR. HAMNER: We're not, we first

22 found the psyllid, it was about ten years ago

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1 in Palm Beach, the Palm Beach area, and we

2 believe, and we're not sure exactly where it

3 came from, Dr. Gmitter probably knows better

4 than I do.

5 DR. GMITTER: I'm Fred Gmitter,

6 University of Florida. The Asian citrus

7 psyllid is the full name of this creature. It

8 was found in Florida in 1998. It was

9 introduced, it is not a native insect.

10 MR. McFETRIDGE: Thank you.

11 Another quick question. So, before when you

12 were removing trees and you had replacements,

13 how many years would it usually take once

14 you've replanted a tree before it would

15 become, you know, fully, meet its full

16 production capabilities?

17 MR. HILL: Your Honor, would it be

18 helpful to swear --

19 JUDGE CLIFTON: You know, it

20 would. That's an excellent idea. I like the

21 way this is going, this is very good, but

22 those of you who are seated here at the, I'll

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1 call it the board table, I'll swear you in and

2 then I'll ask you if what you've told me so

3 far is the truth. So, would each of the three

4 of you please raise your right hand?

5 Does each of you solemnly swear or

6 affirm under penalty of perjury that the

7 evidence you will present will be the truth?

8 And when you say I do, I want your name.

9 (Witnesses sworn.)

10 GEORGE HAMNER,

11 FRED SMITTER,

12 FRANK M. HUNT III,

13 called as a witness herein, having been first

14 duly sworn, testified as follows:

15 MR. HAMNER: I do, George Hamner.

16 DR. GMITTER: I do, Fred Gmitter.

17 MR. HUNT: I do, Frank M. Hunt

18 III.

19 JUDGE CLIFTON: Thank you. And

20 for the gentlemen who have already helped us

21 with some of these difficult questions, is

22 what you have presented so far the truth? And

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1 again, I need your name with your answer.

2 MR. HAMNER: This is George

3 Hamner, Jr., and yes, what I have presented

4 was the truth.

5 DR. GMITTER: Fred Gmitter, yes,

6 what I have presented is the truth.

7 JUDGE CLIFTON: Thank you, Mr.

8 Hill. Mr. McFetridge, your next question?

9 MR. McFETRIDGE: Yes. When you're

10 replacing trees, about how many years would

11 you say it takes for a tree, once it's been

12 replaced, to reach full production capacity or

13 capabilities?

14 MR. HAMNER: The rule of thumb in

15 history is we all count on about five years.

16 We have new production technics that are

17 coming in with new plantings and densities

18 that may change that fairly dramatically in

19 the future, at least we hope they do. But

20 let's say rule of thumb for today is five

21 years.

22 MR. McFETRIDGE: Before greening

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1 and canker were observed or became prevalent

2 in your industry, how long would you say a

3 grove could last without having to replace any

4 trees? Would they last 30, 40, 50 years? Or

5 was it a shorter time frame than that?

6 MR. HAMNER: Frank, you can chime

7 in. This is George Hamner. The rule of

8 thumb, we would all talk about 25 years but

9 there are groves around the state that are

10 well into their 40's, some 50's. So, the age

11 of trees was, I won't say indefinite, it was

12 fairly significantly long.

13 MR. McFETRIDGE: My last question

14 is you discussed development of new varieties,

15 you know, easier peel, fewer seeds. I guess

16 what would be a rough estimate would you say

17 to develop something like this before it can

18 actually be put in to the mainstream market?

19 How long would you say that, if it has

20 happened yet, would you say --

21 MR. HAMNER: We would like to know

22 the answer to that. I don't know.

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1 DR. GMITTER: I'm Fred Gmitter,

2 and you see, you caught some interest here in

3 the industry. Citrus breeding, the

4 development of new varieties historically has

5 taken as long as 25 to 30 years from the time

6 the cross was made until the variety was

7 released. We have shortened that

8 substantially by some new technology and new

9 approaches, but most significantly by the

10 approach that we're taking toward

11 commercialization.

12 Historically, our industry

13 expected that we would have 15 to 20 years

14 worth of data, performance of a variety in

15 different locations on different rootstocks

16 and so on. Given the sense of urgency that

17 you hear in our industry here, we have, we the

18 University of Florida at least has developed

19 a new model in conjunction with the industry

20 that we're calling a fast track option. It's

21 a tiered system, three tiers of involvement.

22 The first tier is something where

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1 we're trying to encourage the growers to plant

2 a limited number of trees so in fact they can

3 have the experience of testing them on

4 different rootstocks in different locations.

5 Tier two comes when a decision is made to

6 commercialize, and that is going beyond a

7 certain predetermined limited number of trees,

8 we're going to plant more trees and there's

9 royalties and so on associated with that. And

10 then the third tier is for people who did not

11 engage in tier one to come in.

12 So, we're trying to hasten all of

13 this now. And currently, we have in this past

14 year released nine new varieties that are

15 about to become available to our industry

16 through this fast track option.

17 MR. McFETRIDGE: So, this fast

18 track option, how many years was that about?

19 DR. GMITTER: The plan as it is

20 for tier one is to allow two years for

21 increase in trees, production of trees in

22 citrus nurseries, and then five years of

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1 evaluation in growers' orchards, in groves.

2 That being said, we did not exclude the option

3 of some entities, some grower or group of

4 growers immediately leaping into the so-called

5 tier two and making a decision that they have

6 enough faith in what they see in the product

7 and their marketing instincts that they want

8 to run with it. So, potentially,

9 theoretically, one or several of these nine

10 that have currently been put on the block if

11 you will could go commercial immediately.

12 Still, there is a two-year time

13 lag to produce the numbers of trees needed,

14 and a few years in the grove for the trees to

15 grow and produce a crop sufficient to be

16 marketed.

17 MR. McFETRIDGE: Thank you. How

18 many years in development before the trees are

19 available?

20 DR. GMITTER: The development, you

21 mean the breeding process itself?

22 MR. McFETRIDGE: Yes. Yes,

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1 exactly.

2 DR. GMITTER: Depending on the

3 kind of citrus that you're working with, when

4 one makes a cross and you harvest seeds at the

5 end of the year and you grow them out, you

6 have a family of individuals from which you're

7 selecting the superior individuals, that can

8 take anywhere from three to seven years before

9 those trees first flower and fruit. You want

10 to observe fruit for two or three years

11 because as the trees mature, the quality

12 attributes of the fruit change somewhat, just

13 like humans. You're mature at age 14 but

14 you're not as mature as you are when you're

15 25. And so, there are these changes that take

16 place.

17 So, you're looking at another two

18 or three years of evaluation. And then, as I

19 mentioned, historically we would like to

20 propagate from that selection, that individual

21 tree that's been selected, propagate trees and

22 test them under different conditions. This

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1 fast track option is where we're interfering

2 with that process. We are actually allowing

3 growers in some cases on the basis of the

4 performance of one individual tree to take the

5 gamble and get into the fast track option and

6 to see whether or not there is something there

7 of interest.

8 MR. McFETRIDGE: Thank you very

9 much.

10 DR. GMITTER: You're welcome.

11 MR. McFETRIDGE: My last question

12 with the diseases, canker and greening, have

13 you noticed any specific, like do they attack

14 oranges or grapefruits, do you see it as non-

15 specific or is it one section of the industry

16 being hit harder than the others?

17 MR. HUNT: Okay, I'm Frank Hunt

18 III. Some clarification with canker and

19 citrus greening, you're actually talking about

20 two different diseases. With the citrus

21 canker, it's a bacteria that is spread by wind

22 and rain and impacts pretty much all

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1 varieties, some to a greater extent than

2 others. It's been particularly hard on

3 grapefruit, particularly hard on navel

4 oranges, and is really a fresh fruit issue.

5 We have learned, initially we were roguing

6 trees on the canker, we were pushing out large

7 areas. We've learned that we can suppress the

8 canker and maybe live with it.

9 Citrus greening is a whole other

10 animal spread by the Asian citrus psyllid that

11 is devastating the industry and is pretty much

12 affecting all varieties, again some perhaps a

13 little more than others. But a lot of it

14 depends on how the grower responds to it.

15 These diseases tend to have a latency period

16 before they manifest themselves, and in some

17 cases the growers have let the disease get out

18 of hand before they've responded. Well,

19 growers that aren't managing the disease are

20 suffering to a greater extent.

21 With the citrus greening, we are

22 trying to suppress the psyllid, we're pushing

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1 nutritionals to enhance the tree because the

2 greening impacts that tree's ability to take

3 up nutrients and to sustain itself. And so,

4 we're trying to support it by nutritional

5 sprays, both foliar and fertilizers to the

6 root system. So, it's one of these diseases

7 that over time we're not sure what the outcome

8 is going to be because right now we're simply

9 maintaining and we really need a solution to

10 those diseases.

11 In the meantime, this industry

12 also is challenged in the varieties that we

13 have and what we're producing to deliver to

14 the market. And so, that's why for the new

15 varieties that are coming on, we've really

16 been challenging our breeders to get these out

17 and deliver them to us so we can determine

18 whether they're going to be commercially

19 viable and something we'll have going forward,

20 trying to shorten up that time period.

21 MR. McFETRIDGE: Thank you very

22 much. I don't have any further questions.

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1 JUDGE CLIFTON: Who else from USDA

2 has any questions either of the witness in the

3 stand or of the others?

4 MS. VARELA: I do. I have one

5 question for you.

6 JUDGE CLIFTON: And you're Ms.

7 Varela? If you would identify yourself?

8 MS. VARELA: Jennie Varela, USDA.

9 EXAMINATION

10 BY MS. VARELA:

11 Q Going back to page 2 of your

12 testimony, I know earlier you clarified for us

13 that usually when you mentioned a section

14 number you were talking about the order. But

15 when you're talking about grapefruit imports

16 and you mentioned 8-E, I just wanted to

17 clarify that you're not talking about a

18 section of the order, you were referring to a

19 section of the Agricultural Marketing

20 Agreement Act, right?

21 A Correct. It is not, 8-E is not in

22 Marketing Order No. 905.

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1 MS. VARELA: Okay, thank you.

2 JUDGE CLIFTON: Good job. Are

3 there other questions from USDA? All right.

4 Are there other questions from anyone for this

5 witness? Well, either the witness who is on

6 the stand or the others who have assisted in

7 the areas of interest that we've covered so

8 far?

9 Is there anything, Mr. Chadwell,

10 that you'd like to add based on what others

11 have said during your testimony time?

12 THE WITNESS: No, ma'am.

13 JUDGE CLIFTON: Is there any

14 objection to the admission into evidence of

15 Exhibit 9 which is Mr. Chadwell's testimony?

16 There is none. Exhibit 9 is admitted into

17 evidence.

18 Is there any objection to the

19 admission into evidence of Exhibit 10 which is

20 the PowerPoint that Mr. Chadwell presented?

21 There is none. Exhibit 10 is admitted into

22 evidence.

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1 All right. Now, any witness can

2 be recalled at any time. So, if you step down

3 and you think of something later that you want

4 to present, you're welcome back. Just let us

5 know. You may step down, Mr. Chadwell, thank

6 you.

7 All right. It's 12:19. I show

8 that Mr. Hamner would be the next witness.

9 Would you like to proceed now?

10 (Whereupon Exhibit Nos.

11 9 and 10 were received

12 into evidence.)

13 MR. HAMNER: I can present now.

14 My testimony is basically a summary, brief

15 summary of all the proposals, and the people

16 that follow me will give the most detail. So,

17 I can either go quickly or go through my

18 proposal now, or we can go to lunch and come

19 back and I'll do it afterwards, whichever

20 feels most coherent to the group.

21 JUDGE CLIFTON: All right. I

22 don't want to encourage anyone to go quickly.

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1 I mean I don't want anyone to --

2 MR. HAMNER: I'm sorry, I'm

3 redheaded, ADD and challenged. I was more

4 worried about happy hour.

5 JUDGE CLIFTON: You are funny.

6 I'd like to just have a show of hands, and the

7 vote is whether to break for lunch now or hear

8 some testimony first and break for lunch

9 later. So, the choices are now and later.

10 How many of you would like to break for lunch

11 now? Zero. How many would like to break

12 later? Also zero.

13 MR. HAMNER: Either way.

14 JUDGE CLIFTON: What would you

15 choose?

16 MR. HAMNER: I'm good to go and

17 then we could, you know, it's 12:30, if

18 they're going to eat lunch we probably ought

19 to break now and then we could come back at

20 1:00 maybe, do it quickly.

21 JUDGE CLIFTON: Okay, you just

22 answered both ways.

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1 MR. HAMNER: I am ready to go now

2 but I think if you really want to have lunch

3 and you're going to have an afternoon session,

4 it probably would be better to break now and

5 then come back hopefully by 1:00 o'clock or 45

6 minutes, quickly.

7 JUDGE CLIFTON: Okay. Now, when

8 you say by 1:00 o'clock, that's 40 minutes.

9 Is that doable? I'm getting yeses. 1:15? I

10 think that's more reasonable. That's 55

11 minutes.

12 MR. HAMNER: Okay. All right.

13 JUDGE CLIFTON: All right, we'll

14 break now. Please be back and ready to go at

15 1:15.

16 (Lunch recess at 12:22 p.m.)

17 JUDGE CLIFTON: Back on record at

18 1:25. I fell in love with Winter Haven during

19 the break, it's gorgeous out there. Will we

20 have Mr. Hamner be the next witness?

21 MR. HILL: Yes, ma'am. I'm going

22 to sit over here if that's all right with you

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1 all.

2 JUDGE CLIFTON: It is. Let us

3 mark your exhibits with numbers. The first

4 one will be 11.

5 MR. HILL: Okay.

6 JUDGE CLIFTON: Which one will

7 that be, the testimony?

8 MR. HILL: That would be the

9 testimony is first. There are five exhibits.

10 The testimony is first, No. 11.

11 JUDGE CLIFTON: Okay, let's mark

12 the testimony then as Exhibit 11.

13 (Whereupon Exhibit No.

14 11 was marked for

15 identification.)

16 MR. HILL: The PowerPoint which is

17 the summary of the proposed amendments would

18 be next.

19 JUDGE CLIFTON: All right, the

20 PowerPoint then will be Exhibit 12.

21 (Whereupon Exhibit No.

22 12 was marked for

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1 identification.)

2 MR. HILL: And there are three

3 letters from individuals, some of the regional

4 and the statewide grower organizations which

5 we had alluded to earlier, and the first one

6 is Florida Citrus Packers.

7 JUDGE CLIFTON: Let's see now. I

8 want to make sure I've got them in the same

9 order as you. So, Florida Citrus Packers?

10 MR. HILL: If you want to wait

11 until after, I can't remember, the PowerPoint

12 presentation has get them. If you want to

13 wait until --

14 JUDGE CLIFTON: Okay, we'll wait

15 to mark those until you get to that.

16 MR. HILL: Okay, wait. He says

17 it's Florida Citrus Mutual is first.

18 JUDGE CLIFTON: Okay, so that will

19 be, Florida Citrus Mutual will be Exhibit 13.

20 All right?

21 (Whereupon Exhibit No.

22 13 was marked for

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1 identification.)

2 MR. HILL: And Florida Citrus

3 Packers.

4 JUDGE CLIFTON: That will be

5 Exhibit 14.

6 (Whereupon Exhibit No.

7 14 was marked for

8 identification.)

9 MR. HILL: And then Indian River

10 Citrus League.

11 JUDGE CLIFTON: That will be

12 Exhibit 15, 1-5.

13 (Whereupon Exhibit No.

14 15 was marked for

15 identification.)

16 MR. HILL: Okay.

17 JUDGE CLIFTON: All right. Mr.

18 Hamner, you remain sworn. I'd like you now to

19 state and spell your full name.

20 MR. HILL: My name is George F.

21 Hamner, Jr., G-e-o-r-g-e, middle initial F,

22 last name is H-a-m-n-e-r, Jr.

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1 JUDGE CLIFTON: Thank you, you may

2 proceed.

3 TESTIMONY BY MR. GEORGE HAMNER

4 THE WITNESS: The purpose of my

5 testimony is to give you all a brief summary

6 of the proposals that will follow with the

7 individuals behind me. My name is George F.

8 Hamner, Jr. I reside at 995 Sandfly Lane,

9 Vero Beach, Florida. I am the current

10 Chairman of the Citrus Administrative

11 Committee which we call the committee, and was

12 the Chairman of the Rules Study Subcommittee,

13 the Rules Subcommittee during the 2010-11

14 season when these proposed amendments were

15 developed and presented to the committee.

16 I have been a shipper member or an

17 alternate of the CAC for over 25 years. I am

18 President of Vero Producers, Inc. which

19 produces citrus in the Indian River production

20 area, and President of Indian River Exchange

21 Packers, Inc., a shipper of Florida citrus to

22 both domestic and export markets. These are

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1 family-owned companies and would be considered

2 by the SBA as a large grower shipper.

3 During my tenure in the Florida

4 citrus industry, I have served as President of

5 the Florida Citrus Packers, Florida Citrus

6 Mutual, Indian River Citrus League, as well as

7 having been a member of the 601 Study

8 Committee of the Florida Department of Citrus.

9 The last time Marketing Order 905,

10 which we will refer to as the order, was

11 amended was in July 2009. And in the past

12 four seasons, there have been numerous new

13 developments within the citrus industry as

14 evidenced in the opening remarks by Mr.

15 Chadwell. Due to the many changes in the

16 industry, Chairman Marty McKenna of the

17 Florida Citrus Commission, we'll refer to as

18 the commission later, appointed a group of

19 industry leaders to the 601 Committee to

20 review and make recommendations to the

21 commission on Chapter 601 of the Florida

22 statutes, we'll refer to as Chapter 601.

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1 Since Chapter 601 is the basis for

2 the industry's governing legislation, a number

3 of public meetings were held with input being

4 given from all the various Florida citrus

5 organizations. The 601 committee's

6 recommendations were approved by the Florida

7 Citrus Commission and, subsequently, the

8 Florida legislature. Part of the 601

9 committee's recommendations supported moving

10 a number of the regulations along with the

11 authority to make or change the rules

12 governing fresh fruit out of Chapter 601 and

13 into Florida Department of Citrus Rules

14 regulated under Florida Statutes Chapter 20,

15 which I'll call Chapter 20, which governs

16 fresh fruit.

17 The purpose of moving these rules

18 and regulations out of Chapter 601 to Chapter

19 20 was to grant rulemaking authority to the

20 Florida Citrus Commission rather than leaving

21 the sole authority in the hands of the Florida

22 legislature, thus, simplifying the process for

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1 growers and shippers to make alterations as

2 needed. Currently, the order does not

3 regulate intrastate shipments as they are now

4 regulated only under Chapter 20. The Florida

5 Citrus Packers sent a letter requesting the

6 committee to consider formal rulemaking in

7 order to amend the order to include the

8 regulation of intrastate shipments.

9 It was in response to this request

10 that the CAC Chairman Paul Genke appointed me

11 to the Chair of the Rules Subcommittee which

12 was to review and consider their request as

13 well as to identify any other rule changes,

14 both formal and informal, that would benefit

15 the fresh industry in administering the order.

16 A list of possible rule changes to the order

17 was developed for the subcommittee's review

18 and consideration after discussions with the

19 United States Department of Agriculture

20 (USDA), Marketing Order Administration Branch

21 (MOAB), and the Committee Chairman Genke and

22 Manager Chadwell.

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1 The Rules Subcommittee was made up

2 of committee members, alternate members, and

3 subcommittee members who were also members of

4 Florida Citrus Mutual, Florida Citrus Packers,

5 Indian River Citrus League, Gulf Citrus

6 Growers, and Peace River Citrus Growers.

7 Meetings were held throughout the 2011-12

8 season to develop language for amendments to

9 the order. In addition to the subcommittee

10 meetings, there were meetings with the legal

11 team from MOAB, representatives of the USDA

12 Marketing Field Office in Winter Haven, and

13 with Peter Chaires, Executive Director of the

14 New Varieties Development and Management

15 Corporation (NVDMC).

16 The Rules Subcommittee met again

17 on June 12th, 2012 and, after due

18 consideration, recommended nine amendments to

19 the order which will allow the inclusion of

20 new varieties and hybrids to the order, and

21 changes that will aid in the administration of

22 the order. These recommendations were

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1 reviewed, considered and approved by the

2 committee on July 17th, 2012. The CAC

3 requested that the Secretary of Agriculture

4 set a public hearing date on the proposed

5 rulemaking, and it was noticed in the Federal

6 Register on March 28th, 2013.

7 Ladies and gentlemen, that's why

8 we're here.

9 JUDGE CLIFTON: Thank you. Before

10 you go on, I would like someone from the USDA

11 side to clarify what used to be called MOAB

12 with a B and the current designation. Who

13 would like to explain that for the record?

14 THE WITNESS: Are we confused over

15 here again?

16 JUDGE CLIFTON: They all know and

17 they're fighting over who does this. Ms.

18 Schmaedick?

19 MS. SCHMAEDICK: Melissa

20 Schmaedick, USDA. In 2012, what was formerly

21 known as the Marketing Order Administrative

22 Branch was redesignated as the Marketing Order

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1 Administrative Division.

2 THE WITNESS: Oh, you're a D now.

3 MS. SCHMAEDICK: And Agreement

4 Division. There you go, Marketing Order and

5 Agreement Division.

6 THE WITNESS: Marketing Order --

7 MS. SCHMAEDICK: And Agreement

8 Division.

9 THE WITNESS: And Agreement

10 Division.

11 MS. SCHMAEDICK: Correct.

12 JUDGE CLIFTON: Now, are all

13 marketing agreements regulations?

14 MS. SCHMAEDICK: I'm sorry?

15 JUDGE CLIFTON: The ones that your

16 office would administer?

17 MS. SCHMAEDICK: Agreements or

18 orders?

19 JUDGE CLIFTON: Okay, let me start

20 with orders. Are all marketing orders

21 regulations?

22 MS. SCHMAEDICK: Yes.

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1 JUDGE CLIFTON: Are all marketing

2 agreements regulations?

3 MS. SCHMAEDICK: Yes.

4 JUDGE CLIFTON: What's the

5 difference?

6 MS. SCHMAEDICK: Are you asking me

7 to testify?

8 JUDGE CLIFTON: If you want to

9 answer. If you don't want to answer, you can

10 make it clear to me as we go on.

11 MR. NISSEN: Orders are mandatory,

12 agreements are not.

13 MS. SCHMAEDICK: Orders are

14 established under certain authorities under

15 the AMAA. And, excuse me, agreements are

16 components that are typically party to

17 marketing orders and they are of voluntary

18 recognition by handlers and industry to comply

19 with the order.

20 JUDGE CLIFTON: All right. And

21 for the record, I'd like to have

22 identification of your helper, your coach.

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1 Mr. Nissen, would you approach the microphone

2 so that you can say who you are?

3 MR. NISSEN: Christian Nissen with

4 SEMFO. Do you want me to say what I said

5 before?

6 JUDGE CLIFTON: First, I want you

7 to say who you are.

8 MR. NISSEN: I am Christian Nissen

9 with the Southeast Marketing Field Office.

10 JUDGE CLIFTON: And then I want

11 you to say what you said before.

12 MR. NISSEN: The primary

13 difference between orders and agreements is

14 that orders are mandatory. If they're put in

15 place by the industry, all industry are held

16 accountable to the order. Whereas agreement,

17 you can choose to sign and be a part of the

18 agreement or you don't have to.

19 JUDGE CLIFTON: Thank you.

20 MR. NISSEN: And you know, most

21 agreements are included as part of an order

22 but you can have a freestanding stand-alone

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1 agreement which I don't believe we have

2 currently.

3 JUDGE CLIFTON: All right. And is

4 it your understanding that even if the item is

5 an agreement, that it would still be found

6 somewhere in the federal regulations?

7 MR. NISSEN: Yes.

8 JUDGE CLIFTON: Okay. All right,

9 that's all very helpful. Thank you, Mr.

10 Nissen. And thank you, Ms. Schmaedick. Does

11 anyone want to add to that?

12 THE WITNESS: Your Honor, would

13 you like my testimony amended to the --

14 JUDGE CLIFTON: No, your testimony

15 is perfect.

16 THE WITNESS: Okay.

17 JUDGE CLIFTON: It's just that I

18 was surprised by the change, and now I know

19 even more about it which I appreciate. Okay,

20 good. Mr. Hamner, you may proceed.

21 THE WITNESS: Okay. The next

22 order from my standpoint is to go through a

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1 summary of the proposals as they stand. I

2 have them on a PowerPoint over here. And if

3 you have questions, I'm going to, I'll read

4 the proposal but I also may ad-lib or

5 whatever. If you have questions, you can stop

6 me on each proposal. And if there's anything

7 in detail requested, then I'll pass it on to

8 the people for the more detail later if that's

9 all right.

10 So, okay. Proposed Amendment No.

11 1 is Section 905.4 "Fruit" and 905.5

12 "Variety." This amendment provides for the

13 inclusion of new varieties and hybrids under

14 the order. Currently, the New Varieties

15 Development and Management Corporation whose

16 board is composed of citrus growers and

17 handlers and funded by citrus growers is

18 actively working to identify, acquire, and

19 sublease promising citrus varieties and

20 hybrids for Florida --

21 JUDGE CLIFTON: Let me stop you.

22 You said sublease, but your slide says sub-

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1 license.

2 THE WITNESS: Did I say sublease?

3 JUDGE CLIFTON: Yes.

4 THE WITNESS: Damn, I thought I'd

5 get through this without, I only majored in

6 graduation. So, it's identify, acquire and

7 sub-license promising citrus varieties and

8 hybrids for the Florida citrus grower.

9 In order to regulate these new

10 varieties and hybrids, new language must be

11 adopted that would allow them to be included

12 under the order. You're going to see and hear

13 later that we're not sure the blends, the

14 mixes and what's coming. What we tried to do

15 is, as you will see, is simplify in the order,

16 grapefruit, tangerine, mandarin, round

17 oranges, et cetera, rather than identifying

18 all of the citrus reticulata, et cetera; all

19 of the blends that we used to do in the past.

20 Which leaves us open to call a new variety

21 what we feel like it should be. And that's

22 what this is all about.

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1 Proposed Amendment No. 2, Section

2 905.9, handle or ship. This amendment

3 provides the authority to regulate intrastate

4 shipments. Given the increasing segmentation

5 of the Florida citrus industry, the fresh

6 segment of the industry, through the Citrus

7 Administrative Committee, has determined that

8 it may be beneficial to incorporate all fresh

9 citrus regulation under the order to provide

10 an orderly transition if, and if is key here,

11 the Florida Department of Citrus discontinues

12 or modifies its regulation of the fresh

13 segment.

14 This started in 2009, when we

15 added the taxation base to the CAC, and we

16 added some other regulations. This is going

17 full circle now, as an industry, and the CAC,

18 in particular. We felt like the CAC should b

19 e in a position to regulate fresh shipments in

20 all facets should they ever need to. There's

21 never been, and never will be, an intention to

22 override the Department of Citrus or the

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1 Florida Department of Agriculture, or

2 anything.

3 But, should this arise and either

4 dissolves or changes long-term, that's the

5 purpose that starts. And you're going to see

6 several of these proposals tied to this. This

7 gives us kind of control of our own destiny.

8 Proposed Amendment No. 3, Section

9 905.14, redistricting. The amendment would

10 grant flexibility to the CAC in redefining

11 grower districts within the production area

12 when the criteria and relevant factors within

13 the production area warrant redistricting.

14 Disease and natural disasters over the past

15 decade have significantly affected bearing

16 trees.

17 The amendment would allow the CAC,

18 at any time, to base their determination of

19 grower districts on bearing trees, volume of

20 fresh fruit, total number of acres of citrus,

21 and other relevant factors when conditions

22 warrant. It is imperative, if we're going to

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1 control our destiny and eventually taxation,

2 rules and regulations, that potentially down

3 the road we may have to redistrict ourselves

4 where the fruit is.

5 Which, rather than looking at a

6 five-year order or some determined lineal time

7 frame, we may end up just wanting to change

8 ourselves around based on what we know about

9 the industry. And the committee would do that

10 on its own now with this. And that just lets

11 us, it gives us a flexibility to regroup if

12 necessary. We're down to three districts, I

13 think, now, and you know that may change

14 again.

15 JUDGE CLIFTON: Now, I just want

16 to point of clarification. The committee that

17 you're referring to is the one that operates

18 this marketing order that we're here about.

19 Is that correct?

20 THE WITNESS: Yes, ma'am.

21 JUDGE CLIFTON: Okay. And so,

22 when you say they could do it on their own,

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1 you mean on their own with the oversight of

2 the Secretary of Agriculture.

3 THE WITNESS: Yes, ma'am. No

4 question.

5 JUDGE CLIFTON: Okay.

6 THE WITNESS: I would not ever,

7 couldn't oversee, we're overseen by the

8 Secretary, yes, ma'am.

9 JUDGE CLIFTON: Okay. Thank you.

10 THE WITNESS: We would recommend

11 the change would be probably what would

12 happen. You sure I'm not married to you?

13 This is like my wife. I only get a

14 recommendation. That's the best I can get out

15 of this.

16 Proposed Amendment No. 4, Section

17 905.2, term of office. This amendment would

18 extend the term of office to two years, and

19 limits a member to two consecutive two-year

20 terms. Two-year terms would allow for

21 biennial nomination meetings, which would aid

22 in the administrative efficiencies and

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1 stability. The current one-year term of

2 office is administratively inefficient and

3 requires additional committee resources.

4 We think that what we'd like to do

5 is just simply extend ourselves out. Do two-

6 year terms, and move off of the three one-year

7 terms. And I think that will broaden our base

8 of participation, as well. And save us some

9 money, we hope.

10 Proposed Amendment No. 5,

11 nominations. Nomination meetings require

12 time, travel and administrative costs and,

13 consequently, have low participation. This

14 amendment would allow the CAC to conduct the

15 nomination and/or election of members and

16 alternates by mail or other means, according

17 to rules and regulations recommended by the

18 CAC and approved by the Secretary of

19 Agriculture.

20 Currently, the CAC holds grower

21 nomination meetings in each of the three

22 grower districts, and one shipper nomination

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1 meeting annually. Conducting nomination

2 meetings by mail or other means would be cost

3 effective, and allow for direct communication,

4 and could increase participation and

5 diversity. One of the informal changes has

6 been we hold conference calls now. And we

7 feel it's only practical, for a nomination,

8 that we be allowed to do in writing of some

9 form, whether it's e-mail or mailing. That we

10 broaden our perspective of how we nominate

11 members.

12 Proposed Amendment No. 6, Section

13 901.42, handlers accounts. This amendment

14 would allow the CAC to increase their reserves

15 up to two fiscal periods' expenses.

16 Currently, reserves are capped at

17 approximately one-half year's fiscal expense,

18 which limits flexibility to develop and

19 implements projects requiring advertising,

20 promotion or research, without raising the

21 assessment rate during the season.

22 The amendment would also provide

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1 greater flexibility to the administration of

2 the marketing order programs, and promote

3 assessment stability. Currently, we've burned

4 down our reserves to almost zero. We're going

5 to have to build back up. This is, we have

6 got a history in the Florida CAC of not doing

7 something if we don't think it's necessary.

8 With the changes we have made five years ago,

9 or four years ago with the taxation, et

10 cetera, if something did happen, and if the

11 CAC was in charge of its own destiny on fresh

12 fruit, we would have to have a bigger reserve

13 because we'd have more money coming in.

14 And this is the one way to do

15 that. And we don't, this is not mandatory.

16 This would be by a vote of the board, or the

17 committee. It's not something that's written

18 in stone, but we wanted the flexibility to

19 broaden, to be able to allow it to go up.

20 Proposed Amendment No. 7, Section

21 905.52, issuance of regulations. The

22 amendment provides for regulating containers

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1 and for having different standards, grade and

2 size regulations within the production area.

3 Currently, the DOC governs containers and

4 standards for Florida citrus sold within the

5 production area, which is intrastate. This

6 is, basically, intrastate.

7 As proposed, Amendment No. 2,

8 regulation of intrastate shipments, at this

9 time, there is not a plan to utilize this

10 authority, but to put it under the order so it

11 will be in place if the DOC discontinues

12 regulating the fresh segment of the Florida

13 citrus industry. Same thing. For us, this is

14 almost housekeeping. If you're going to run

15 your own show, or be in the position to run

16 it, you have to do this.

17 Proposed Amendment No. 8, Section

18 905.28, acceptance of membership. The

19 amendment would eliminate acceptance

20 statements. The nominees currently complete

21 both a background and acceptance statement

22 when they are nominated. The elimination of

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1 the acceptance statement would reduce

2 paperwork and save administrative costs.

3 As you can see, we're good at

4 killing trees around here. We actually all

5 have to fill out a background statement, sign

6 on the bottom that we agree to serve. After

7 we've been nominated and elected, we get

8 another statement from the government that

9 says okay, you did accept, correct? This, to

10 us, is redundant, and we'd like to eliminate

11 it. We would put it in the sequester, but it

12 didn't work.

13 Proposed Amendment No. 9, Section

14 905.7, handler. This amendment provides for

15 the registration of handlers. Currently, the

16 Florida Department of Agriculture and Consumer

17 Services Division of Fruit and Vegetable, has

18 a registration program for handlers of Florida

19 citrus. However, the CAC determined

20 registering handlers would be beneficial, as

21 it would enhance the compliance provisions of

22 the order.

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1 Unseen to you all, in formal rule

2 making, we want our handlers to list our

3 growers, in some form or fashion, as one items

4 listed under this in a different way. But, so

5 that we're contacting growers for votes

6 without doing a blank mailing of the whole

7 state. The second part is, if we are taxing or

8 we have authorities, et cetera, this is just

9 one list, a pressure to keep everybody

10 compliant. That's what the registration's

11 for.

12 Okay, any questions? We do have,

13 we did run this, I know that, Melissa, you

14 asked about this before. We did run this

15 through, for a long time, with the industry.

16 This was not something haphazardly done.

17 Because of the fact that starting for years

18 ago and five years ago, with the taxation and

19 the potential for being under our own

20 guidance, we wanted the industry to know

21 that's what we were looking at.

22 We ran this by Florida Citrus

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1 Mutual, Florida Citrus Packers, the Indian

2 River Citrus League. We had committee members

3 from Peace River, the other regional growing

4 areas. And we have letters to prove it from

5 these three people, which we've put out as

6 Exhibits 13, 14, and 15. Any questions? What

7 did I miss, Melissa?

8 EXAMINATION

9 BY MS. SCHMAEDICK:

10 Q Thank you, Mr. Hamner, for your

11 testimony. This is Melissa Schmaedick with

12 USDA. I have two questions for you. One is

13 a clarifying question. You've mentioned a

14 couple of times taxation or taxing. Can you

15 explain what you mean by that?

16 A The tax, that's probably in this

17 hearing, is not necessary. We already have

18 taxation. We had broadened our taxation rights

19 in the previous order in 2009, so that we can

20 expand into advertising and research. And we

21 have a litany of items that we could do that

22 we couldn't do before.

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1 Q And --

2 A And interstate shipments.

3 Q By using the term taxation, are

4 you referring to the assessments that are

5 collected?

6 A Yes.

7 Q Thank you.

8 A We interchange words in our

9 industry. That's the assessment, sorry.

10 Q Thank you. You also mentioned,

11 when you described Proposals No. 2 and No. 7,

12 which would, as you stated, allow the

13 marketing order to have some parallel

14 authorities that currently exist under DOC.

15 Based on your experience in the development of

16 these proposals, what have the conversations

17 with DOC been like over these?

18 A It's been fine. Everything thing,

19 we've acknowledged in a lot of the rule

20 making, in fact, I believe, technically,

21 written in, and you may hear this later,

22 there's a part that we acknowledge, even in

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1 our rule, that we won't usurp their authority.

2 But we had long conversations with them.

3 We've got, actually, two commission members

4 here in the audience. And the fact is it just

5 came through the 601 rules committee, as well.

6 It came up in that when we were moving these

7 rule making out of Tallahassee into the

8 Bradenton with the DOC.

9 Q So, based on your knowledge, DOC

10 is aware of and supports these proposals?

11 A Yes, yes.

12 Q Thank you.

13 JUDGE CLIFTON: Mr. Chadwell,

14 would you like to add to that?

15 MR. CHADWELL: Yes.

16 JUDGE CLIFTON: You may.

17 MR. CHADWELL: Arthur Chadwell.

18 Last Wednesday, a week ago today, I was with

19 Chairman Marty McKenna, chairman of the

20 Florida Citrus Commission, and we took some

21 time, and he had gotten the notice of this

22 amendment hearing. And I just wanted to

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1 reassure with him that there was, from his

2 perspective, that there was no conflict of

3 interest in what we were doing. And he

4 assured me that they were fine with what was

5 being proposed, and to have the authority

6 within the marketing order, knowing that we

7 weren't, weren't in a movement to use it, much

8 like five years ago when we put the

9 advertising promotion.

10 So, I took the opportunity of

11 seeing him last week, and just reassuring

12 that, have him reassure that there was not any

13 conflict from the Florida Citrus Commission on

14 this issue.

15 JUDGE CLIFTON: That's helpful.

16 For the record, I would like someone to spell

17 Marty McKenna.

18 THE WITNESS: Marty McKenna is M-

19 a-r-t-y, M-c-K-e-n-n-a.

20 JUDGE CLIFTON: Thank you. Other

21 questions from USDA? Ms. Schmaedick?

22 MS. SCHMAEDICK: I have no further

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1 questions. Thank you.

2 JUDGE CLIFTON: Who else has

3 questions?

4 THE WITNESS: Okay, thank you all.

5 JUDGE CLIFTON: Whoa, you're not

6 done yet.

7 THE WITNESS: English class.

8 JUDGE CLIFTON: One question that

9 occurs to me, in some industries, handlers

10 don't identify their growers when asked

11 because it's proprietary or it's sensitive or

12 the growers wouldn't like that, or something.

13 Is citrus different?

14 THE WITNESS: No, not at all.

15 This is an offshoot of that, why you handle

16 through the committee, informally. And we are

17 proposing to the industry a very strict

18 guideline on how to do this so that it doesn't

19 put everybody in jeopardy. But it will save

20 us quite a bit of money on mailing. We'll get

21 a much higher participation in mailing.

22 Because now we blanket the whole industry, and

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1 you saw how many oranges there were that go to

2 process. And we're not sure who's a fresh

3 grower at times and who's not.

4 JUDGE CLIFTON: Well, is it

5 guarded information that's not publicly

6 available if you gather it for a limited

7 purpose? Is that what you envision?

8 THE WITNESS: Excuse me. I'll let

9 Duke answer.

10 JUDGE CLIFTON: All right, then,

11 Mr. Chadwell, you'll respond to that.

12 MR. CHADWELL: Arthur Chadwell.

13 Yes. We are currently in, we have an informal

14 rule that is in the comment period until May

15 6th. And in that rule, it's allowing the

16 committee, the marketing order, it requires

17 each handler to submit a list of their growers

18 for the current season with their contact

19 information. It will be handled, because

20 there were quite a few questions, as you may

21 expect. When you see data that we put out,

22 the marketing order, if anything, we do not

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1 put any shipment, regulated shipment data per

2 shipper out.

3 And we notify, on reports I will

4 state that this is the Division of Fruit and

5 Vegetables information, because it would have

6 intrastate shipments. So we are bound,

7 through the order, for confidentiality on each

8 shipper's regulated shipments. In developing

9 this informal rule, that was a concern of the

10 industry.

11 And so, we are proposing that we

12 will get the, garner the information from each

13 shipper. We will maintain it by alphabetical

14 of grower, with no identification as to what

15 packing house they are associated with. So,

16 for the Freedom of Information Act, we will

17 have, if required, a list. But it will be

18 only a list of growers by alphabetical order.

19 No relationship of which shipper submitted

20 their names. So we have addressed that,

21 hopefully, in this informal rule making.

22 Which, hopefully, will come out in the next 60

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1 days.

2 THE WITNESS: I think one other

3 thing was is we would --

4 JUDGE CLIFTON: If you'd say who

5 you are.

6 THE WITNESS: I'm George Hamner

7 again. I think the other thing that we were

8 working through is we were going to identify

9 the grower with no contact information for

10 public record keeping.

11 JUDGE CLIFTON: So a person would

12 have only the alphabetical listing of names of

13 growers?

14 THE WITNESS: Right.

15 JUDGE CLIFTON: Without knowing

16 anything more about them?

17 THE WITNESS: Right, correct.

18 JUDGE CLIFTON: Which is not very

19 useful, is it?

20 THE WITNESS: Well, it can and it

21 can't be. Most people probably know most of

22 the growers in Florida. I mean, there's a lot

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1 of crossover. But, the reality is that's, we

2 were trying to keep it more confidential that

3 way, and keep the contact information out.

4 Making it easy, you know, if nothing else.

5 You gotta work at it.

6 JUDGE CLIFTON: All right. Other

7 questions, first by USDA? Ms. Schmaedick?

8 MS. SCHMAEDICK: No further

9 questions, thank you.

10 JUDGE CLIFTON: All right. And

11 now, questions from anyone else in the room.

12 There are none. Mr. Hamner, do you think of

13 anything else you'd like to add at this time?

14 THE WITNESS: No ma'am, thank you

15 very much.

16 JUDGE CLIFTON: Thank you. Are

17 there any objections to the admission into

18 evidence of Exhibit 11, which is the testimony

19 of Mr. Hamner, Exhibit 12, which is his

20 PowerPoint, and Exhibit 13, 14, and 15, which

21 are letters from individuals who are not

22 expected to be here. Is that correct, Mr.

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1 Hamner? They're not here to be cross

2 examined?

3 THE WITNESS: Yes, ma'am.

4 JUDGE CLIFTON: Yes, it's true

5 that they will not be here?

6 THE WITNESS: They will not be

7 here, no ma'am.

8 JUDGE CLIFTON: All right. So,

9 let me start just with 11 and 12 because the

10 author of those is here. Is there any

11 objection to the admission into evidence of

12 Exhibit 11?

13 (No response.)

14 JUDGE CLIFTON: There is none.

15 Exhibit 11 is admitted into evidence. Is

16 there any objection to the admission into

17 evidence of Exhibit 12?

18 (Whereupon Exhibit No.

19 11 was received into

20 evidence.)

21 (No response.)

22 JUDGE CLIFTON: There is none.

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1 Exhibit 12 is admitted into evidence. Is

2 there any objection to the admission into

3 evidence of Exhibits 13, 14, and 15, whose

4 authors are not present for cross examination?

5 Ms. Schmaedick.

6 (Whereupon Exhibit No.

7 12 was received into

8 evidence.)

9 BY MS. SCHMAEDICK:

10 Q Point of clarification. The

11 letter from Florida Citrus Packers. I believe

12 that Peter Chaires is here. Is he not here?

13 Oh, he was here this morning, okay. Excuse

14 me.

15 A The president, the executive

16 director of Florida Citrus Packers was here.

17 He was going to testify shortly on new

18 varieties, but he has taken ill and has left,

19 and we're just going to read in his letter, if

20 that's okay with people, later.

21 Q Okay, thank you. No further

22 questions.

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1 JUDGE CLIFTON: Now, when you say,

2 Mr. Hamner, that you're just going to read in

3 his letter --

4 THE WITNESS: That's later. But

5 just --

6 JUDGE CLIFTON: Oh, his testimony.

7 So that's in addition to Exhibit 14?

8 THE WITNESS: Yes, that's

9 something when we cross the line.

10 JUDGE CLIFTON: All right, so

11 we'll address that when we get to it. All

12 right, are there any other questions, or any

13 other comments? And are there any objections

14 to the admission into evidence of any of these

15 letters, 13, 14, and 15?

16 (No response.)

17 JUDGE CLIFTON: There are none.

18 Those are admitted into evidence. All right,

19 and Mr. Chadwell and Mr. Hamner, who will be

20 the next witness?

21 (Whereupon Exhibit Nos.

22 13, 14, and 15 were

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1 received into evidence.)

2 THE WITNESS: We have some people

3 that need to be here and be gone, so we'd like

4 to move, change the schedule that we had set,

5 had provided earlier. I refer to these as

6 housekeeping, which is a dangerous word. But

7 these have more to do with the shipping and

8 then we, and we'll move into the new varieties

9 after we go through them, if that's all right.

10 So, we'd like to have Paul Genke come forth

11 first to talk about Proposal 4, 5, and 8.

12 JUDGE CLIFTON: All right, and

13 that's 4 and 5 and 8.

14 THE WITNESS: We grouped them

15 where we thought they would make more sense

16 being together.

17 JUDGE CLIFTON: Very fine. If

18 you'd come forward, Mr. Genke, and have a seat

19 in the witness stand, and I'll swear you in

20 from a seated position.

21 MR. GENKE: Do you want me to hand

22 out my testimony, first?

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1 JUDGE CLIFTON: Oh, that would be

2 excellent. Let's go off record while you

3 distribute those copies.

4 (Off the record.)

5 JUDGE CLIFTON: All right, we're

6 back on record at 2:03. Would you raise your

7 right hand, please?

8 Whereupon,

9 PAUL GENKE,

10 called as a witness herein, having been first

11 duly sworn, was examined and testified as

12 follows:

13 JUDGE CLIFTON: Please state and

14 spell your name.

15 THE WITNESS: My name is Paul

16 Genke, P-a-u-l, G-e-n-k-e. And, Your Honor,

17 I do have some exhibits that we need to enter.

18 JUDGE CLIFTON: All right. Let's

19 number these.

20 THE WITNESS: Okay.

21 JUDGE CLIFTON: Now, the next

22 number we'll use will be No. 16.

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1 THE WITNESS: Number 16.

2 JUDGE CLIFTON: What should that

3 be for?

4 THE WITNESS: That will be for the

5 grower sample ballot, which is included in

6 your packet there.

7 JUDGE CLIFTON: Okay, grower

8 sample ballot will be, now okay, so that will

9 be --

10 THE WITNESS: 16.

11 JUDGE CLIFTON: EX, for Exhibit,

12 16. All right, and what's next?

13 THE WITNESS: The next one will be

14 the shipper's sample ballot.

15 JUDGE CLIFTON: All right, the

16 shipper's sample ballot was be Exhibit 17.

17 THE WITNESS: The third one is a

18 confidential background statement for Citrus

19 Administrative Committee Marketing Order 905.

20 That's a two-pager, two pages.

21 JUDGE CLIFTON: Now, let me make

22 sure, now the ballot was only a one page.

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1 THE WITNESS: Yes, the first two

2 ballots only one page.

3 JUDGE CLIFTON: Okay, now what I'm

4 looking at --

5 MR. HILL: I think the two pages

6 are backwards, Your Honor, for 18.

7 JUDGE CLIFTON: Okay, hold up for

8 us the first page --

9 THE WITNESS: Oh, yeah, you're

10 right.

11 MR. HAMNER: Confidential

12 background.

13 JUDGE CLIFTON: Okay, I don't have

14 that in mine.

15 THE WITNESS: Yeah, it's a two-

16 pager, yeah, there's two pages on that one.

17 JUDGE CLIFTON: Okay, let's make

18 sure the court reporter and I both have that

19 one page.

20 THE WITNESS: It's the

21 confidential background statement.

22 JUDGE CLIFTON: Okay, now I do

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1 have that.

2 THE WITNESS: That's the second

3 page of it.

4 JUDGE CLIFTON: But I don't have

5 page one. Are we on record right now? Let's

6 go off.

7 (Off the record.)

8 JUDGE CLIFTON: All right, we're

9 back on record at 2:07. I'm going to mark a

10 document that has a form number down at the

11 bottom left called FV163, and so is page two.

12 They both say FV163. So the first page of it

13 says, up at the top left, reproduced locally.

14 That's page one. So those two pages together

15 are Exhibit 18.

16 THE WITNESS: 18.

17 JUDGE CLIFTON: All right, what's

18 next?

19 THE WITNESS: And the final

20 exhibit will be the, let's see, Citrus

21 Administrative Committee Marketing Order No.

22 905, up in the upper right-hand, OMB No. 0581-

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1 0189.

2 JUDGE CLIFTON: All right, that

3 will be Exhibit 19.

4 THE WITNESS: Okay.

5 JUDGE CLIFTON: And then, your

6 testimony, I'm going to give a number, as

7 well.

8 THE WITNESS: Oh, okay.

9 JUDGE CLIFTON: And that will be

10 Exhibit 20.

11 THE WITNESS: 20, okay.

12 (Whereupon Exhibit Nos.

13 16, 17, 18, 19 and 20

14 were marked for

15 identification.)

16 JUDGE CLIFTON: Okay, tell me

17 again your full name and how to spell it,

18 please.

19 TESTIMONY BY PAUL GENKE

20 THE WITNESS: Okay. My name is

21 Paul Genke, P-a-u-l, last name G-e-n-k-e. And

22 I'm going to go over proposals 4, 5 and 8. I

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1 reside at 5877 Pine Ridge Circle in Vero

2 Beach, Florida. I am director of sales and

3 marketing for the Packers of Indian River,

4 Ltd., family-owned grower, shipper of fresh

5 Florida citrus.

6 Packers of Indian River is mainly

7 a producer and shipper of grapefruit. Last

8 season 93 percent of our packing house

9 shipments were grapefruit, 60 percent in the

10 export market, 40 percent domestic. We'd be

11 considered the Small Business Administration's

12 definition of a large grower and shipper.

13 I was chairman of the Citrus

14 Administrative Committee when we began the

15 process amending Market Order 905, and

16 currently serve on the committee as an

17 alternate shipper member. I'm also a member

18 of the executive committee and past president

19 of Florida Citrus Packers, and a committee

20 member of the Indian River Citrus League.

21 We've grouped these three

22 proposals covering the term of office,

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1 nominations and acceptance of membership for

2 my presentation, as they pertain to the

3 nomination process of members and alternates

4 to the order. All right, the first of these

5 proposals is a proposed Amendment No. 4,

6 Section 905.20, term of office. The term of

7 office of members and alternate members shall

8 begin on the first day of August of even

9 numbered years, and continue for two years,

10 and until their successors are selected and

11 have been qualified.

12 Consecutive term of office of a

13 member shall be limited to two terms. The

14 term of office of alternate members shall not

15 so be limited. Members, their alternates, and

16 their respective successors shall be nominated

17 and selected by the secretary as approved in

18 Section 905.22 and 905.23. This proposal will

19 change the term of office for committee

20 members from one to two years, and the tenure

21 requirement for committee members from three

22 to four.

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1 The current term for members and

2 alternates servicing on a committee is a one-

3 year term, with a limit of three consecutive

4 one-year terms. The committee feels that

5 there are some administrative efficiencies and

6 stability to be gained by extending terms to

7 two years for a member, being able to serve

8 two consecutive two-year terms. Increasing

9 terms to two-year terms, with a maximum limit

10 of two consecutive terms would incorporate

11 consistency, saving administrative time and

12 resources.

13 The fresh segment of our industry

14 is in a rapid transition. In the last 10

15 seasons, the fresh industry has experienced

16 fresh citrus production declines of 50

17 percent, fresh shipment declines of 40

18 percent. Given the transition phase our

19 industry is experiencing, the committee

20 determined this change will support continuity

21 of leadership and representation on the

22 committee.

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1 The next proposal is Amendment No.

2 5, Section 905.22, nominations. A) Grower

3 member, Section 1, committee shall give public

4 notice of a meeting of producers in each

5 district to be held no later than June 10 of

6 even numbered years for the purpose of making

7 nominations for grower members and alternate

8 grower members. The committee, with approval

9 of secretary, shall prescribe uniform rules to

10 govern such meetings and the balloting

11 thereat.

12 The chairman of each meeting shall

13 publicly announce at such meetings the names

14 of the persons nominated. And the chairman

15 and secretary of such meetings shall transmit

16 to the secretary their certification as to the

17 number of votes cast, names of the persons

18 nominated, and such other information as the

19 secretary may request. All nominations shall

20 be submitted to the secretary on or before the

21 20th day of June.

22 Section 2, each nominee shall be a

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1 producer in the district from which he or she

2 is nominated. In voting for nominees, each

3 producer shall be entitled to cast one vote

4 for each nominee in each of the districts in

5 which he or she is a producer. At least two

6 of the nominees and alternated so nominated

7 shall be affiliated with a bona fide

8 cooperative marketing organization.

9 Section B, shipper members.

10 Section 1, the committee shall give public

11 notice of a meeting for bona fide cooperative

12 marketing organizations which are handlers,

13 and a meeting for those handlers which are not

14 so affiliated, to be held no later than June

15 10th of even numbered years for the purpose of

16 making nominations for shipper members and

17 their alternates. The committee, with approval

18 of secretary, shall prescribe uniform rules to

19 govern each such meetings and the balloting

20 thereat.

21 The chairman of each such meeting

22 shall publicly announce at meeting the names

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1 of the persons nominated. And the chairman

2 and secretary of each such meeting shall

3 transmit to the secretary their certification

4 as to the number of votes cast, the weight by

5 volume of those shipments voted, and such

6 other information as the secretary may

7 request. All nominations shall be submitted

8 to the secretary on or before the 20th day of

9 June.

10 Section 2, nomination of at least

11 two members and their alternates should be

12 made by bona fide cooperative marketing

13 organizations which are handlers. Nominations

14 for not more than six members and their

15 alternates shall be made by handlers who are

16 not so affiliated. In voting for nominees,

17 each handler or his or her authorized

18 representative shall be entitled to cast one

19 vote, which shall be weighted by the volume of

20 fruit by such handler during that current

21 fiscal period.

22 Section C, notwithstanding the

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1 provisions of Paragraph A and B of this

2 section, nomination and/or election of members

3 and alternate members of the committee may be

4 conducted by mail or other means according to

5 the rules and regulations recommended by the

6 committee and approved by the secretary.

7 This proposal would authorize mail

8 balloting procedures for committee membership

9 nominations. The proposal of changing terms

10 and term limits, as well as this proposal

11 allowing the committee to conduct nominations

12 by mail or other means, would aid in the

13 administration of the order by direct

14 communication with both growers and handlers

15 in the nomination process. Allowing voting by

16 mail for the nomination or election of members

17 and alternates should increase participation

18 as the committee would directly contact each

19 grower and handler for record by mail or other

20 means, according to the rules and

21 recommendations recommended by the committee

22 and approved by the secretary.

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1 This personal contact should help

2 increase participation and diversity in the

3 nomination process. These proposals mainly

4 deal with the administration of the order, and

5 would have no measurable impact, other than to

6 facilitate the operation of the order for the

7 fresh fruit growers and shippers of Florida

8 citrus.

9 The committee currently conducts

10 grower nomination meetings every year at set

11 locations within the three grower districts.

12 Currently, each grower district nominating

13 meeting requires a grower to vote in person in

14 their respective district. The current

15 process can limit participation due to time

16 and travel requirements to attend the

17 nominating meeting, since some of the grower

18 districts cover a large geographical area.

19 Shipper nominations are currently

20 held at the Florida Department of Citrus

21 headquarters, as it is central location for

22 shippers. Shippers may vote by proxy, and

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1 each shipper's vote is a volume vote of their

2 regulated shipments for a specific time frame.

3 By allowing voting by mail or other means,

4 participation should increase and may increase

5 diversity among the members involved in the

6 nomination process.

7 The committee believes that there

8 will be cost savings to conduct the

9 nominations of members and alternate members

10 by mail or other means. As presented earlier,

11 this measure is coupled with the proposal to

12 extend the term of office from a one-year term

13 to a two-year term, which would decrease

14 administrative and travel costs related to

15 nomination meetings.

16 However, if there is any cost

17 increase, it would be outweighed by the

18 benefit of increased participation and

19 involvement. Also, in anticipation of these

20 changes, the committee has proposed informal

21 rule making to minimize costs by requiring

22 handlers to provide the committee with a list

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1 of the growers whose fruit they handle during

2 the season.

3 Thus, the committee will have an

4 accurate list of the Florida citrus growers

5 engaged in citrus production for the fresh

6 market. Also, the number of fresh citrus

7 growers that are members of a bona fide

8 cooperative marketing organization should

9 offset some of the cost, as their cooperatives

10 would be voting for their membership, thus

11 reducing costs to the committee.

12 The committee will be able to communicate

13 directly with the growers of Florida citrus

14 that market their fruit in the fresh market.

15 It is the committee's anticipation

16 that this change will, in addition to keeping

17 the growers better informed of the committee's

18 activities, but also foster increased

19 participation in our programs. Attached is a

20 sample ballot, sample of the grower ballot for

21 District 1 for voting by mail. The grower

22 ballot is designed to include both independent

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1 and cooperative members. The two major

2 cooperatives are located in District 1. The

3 sample ballot for independent shippers is

4 attached. And there would be a like form for,

5 there would be a like ballot required for

6 cooperative shippers.

7 Proposal 8 would eliminate the

8 requirements to send out a separate acceptance

9 statement with the background statement for

10 nominees, combining both forms. Section

11 905.28, qualifications and acceptance. Any

12 persons selected by the secretary as a member

13 or alternate member of the committee shall,

14 prior to selection by USDA, qualify by filing

15 a written qualifications and acceptance

16 statements indicating such person's

17 qualifications and willingness to serve in the

18 position for which nominated.

19 This will eliminate separate

20 acceptance statements that would reduce

21 paperwork associated with the nomination

22 process. Under this proposal, the nominees

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1 agree to serve, and must only complete the

2 required background statement, which includes

3 a statement of acceptance. Examples of the

4 confidential background statement for Florida

5 Citrus Administrative Committee Marketing

6 Order 905, and the Citrus Administrative

7 Committee Marketing Order No. 905 acceptance

8 letters are included in this testimony.

9 The order currently requires each

10 member and alternate to complete an acceptance

11 letter in addition to the background statement

12 when nominated to serve on the committee.

13 Eliminating the acceptance letter would reduce

14 paperwork and save the time required to

15 complete the letter.

16 All three of these proposals have

17 industry support, and they're designed to aid

18 in the nomination process, and encourage

19 greater participation in the administration of

20 the order for the fresh segment of the Florida

21 citrus industry. And that concludes my

22 testimony, Your Honor.

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1 JUDGE CLIFTON: Thank you. You

2 notice how we didn't interrupt you at all?

3 MR. GENKE: You were waiting for

4 the end, right?

5 JUDGE CLIFTON: Who would like to

6 ask questions of Mr. Genke? Start with USDA.

7 EXAMINATION

8 BY MS. SCHMAEDICK:

9 Q This is Melissa Schmaedick, USDA.

10 Thank you, is it Mr. Genke or Genke?

11 A Genke.

12 Q Genke. Thank you.

13 A I answer to both.

14 Q Thank you for your testimony. On

15 Page 2 of your testimony about the middle of

16 the first full paragraph, you indicate that

17 the committee feels that there would be

18 administrative efficiencies and stability to

19 be gained by extending terms. Could you

20 describe to me what type of increases in

21 stability you'd like to see, and if you have

22 any examples of things that need to be

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1 corrected?

2 A Currently, it's a one-year term.

3 So, each year you have to go through the

4 nominating process again which, you know,

5 takes time and resources to do it. By going

6 to two-year term, and then having two

7 consecutive terms, you're basically going from

8 three to four. It keep continuity in there

9 for, you know, for going through items like

10 this on changing marketing orders. You have

11 the same group in there that are working

12 through it, and can carry the process through,

13 which is a perfect example.

14 Like this year, we spent a lot of

15 time. I was a the chairman when we started

16 this review committee, and then luckily George

17 is on the committee, too, and carried it

18 through. But, continuity and leadership, it

19 would definitely help.

20 Q And, in your experience, is there

21 a concern with turnover or folks not renewing

22 their participation?

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1 A No. Generally, the participation,

2 members on the committee have pretty much

3 filled out their three one-year terms. I

4 don't know of really anybody that's bailed out

5 before that.

6 Q What about concerns over finding

7 new folks to participate?

8 A As our industry shrinks, that is a

9 little bit of a problem. So, part of it is if

10 we get that grower list, right now, as Mr.

11 Chadwell mentioned earlier, we're sending out

12 letters to thousands of growers. Some of them

13 are maybe just process growers. You don't

14 know that. By narrowing it down to get just

15 the fresh fruit growers and keeping them

16 informed of our processes all the time, we

17 hope to create some new membership. But, yes,

18 as the numbers do dwindle, Melissa, it's

19 getting tougher.

20 One example, Florida grapefruit.

21 You go back eight years ago, we produced 40

22 million boxes. This year it's 17.

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1 JUDGE CLIFTON: That would be 17

2 million, I hope.

3 MR. GENKE: Million boxes, 17

4 million boxes. Another example of the

5 industry getting smaller.

6 MR. HAMNER: Your Honor, could I

7 add something to that?

8 JUDGE CLIFTON: Yes, please.

9 MR. HAMNER: Briefly, Melissa, the

10 other part. We were on three one-year terms,

11 which is actually a six-year term. And if you

12 look at the history of the CAC as we got new

13 people, rarely did anybody, you served out

14 your term three times in a row. And then you

15 would either become an alternate, or we would

16 find someone else. This actually shortens the

17 term to four years from six, with the hope

18 that, even though we're shrinking, we will

19 find more people, and we can actually turnover

20 more often, if you think about it.

21 JUDGE CLIFTON: Mr. Hamner, you

22 lost me. I multiplied one year times three

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1 times and I got three. How did you get six?

2 MR. HAMNER: You're allowed to be

3 a member for three one-year terms, and then

4 you were also allowed to become an alternate

5 for three one-year terms. So that would be

6 your, if you rolled over as an alternate from

7 the membership, that would be six. In this

8 case, you'd have a two-year, the two two-year

9 terms, and then you would be off.

10 JUDGE CLIFTON: So you don't

11 rollover to be an alternate?

12 MR. HAMNER: You could be, you

13 could rollover, I guess. I'm sorry, I had it,

14 I was thinking two and two.

15 JUDGE CLIFTON: But it really is

16 six and eight, right?

17 MR. HAMNER: You're right.

18 JUDGE CLIFTON: Possibly.

19 MR. HAMNER: My apologies.

20 JUDGE CLIFTON: Possible.

21 BY MS. SCHMAEDICK:

22 Q Would a person who served a full

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1 term as a member, and then served as an

2 alternate, would they be allowed to, then,

3 serve as a member after their service as an

4 alternate?

5 A Yes.

6 Q So they would, essentially, be

7 able to serve as long they wanted to, as long

8 as they were alternating, or serving in both

9 capacities?

10 A As long as they were nominated.

11 Q Correct, thank you. But is that a

12 fair statement?

13 A Yes.

14 Q And you mentioned the possibility

15 for increasing diversity on your board or your

16 committee. What type of changes in diversity

17 would be possible?

18 A We're, yeah, we've been very

19 active in increasing our, or attempt to

20 diversify the committee beyond just male

21 citrus growers. There are some females

22 involved that are members of the family.

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1 There's some minorities involved. So that's

2 what we're trying to increase. And we do have

3 some members, and Duke's been very active in

4 pursuing diversifying the committee.

5 Q Thank you. I believe I have no

6 further questions, thank you.

7 A Thank you.

8 JUDGE CLIFTON: Who else from

9 USDA? Mr. Hill?

10 BY MR. HILL:

11 Q Okay. You talked well about 4, 5,

12 and 8. I'm just going to ask you some

13 questions about the other ones just briefly.

14 Have you looked at the other proposals, 1, 2,

15 3, 6, 7?

16 A Me, personally, yes.

17 Q So, I'm just going to go ahead and

18 ask you. The first proposal, amending the

19 definitions of fruit and variety. Are you for

20 or against that?

21 A I'm for it.

22 Q The second one, amending the

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1 definition of handle or ship. Are you in

2 support of that?

3 A Support, yes.

4 Q The third proposal is to amend to

5 revise the process for redistricting the

6 production area. Are you for or against that?

7 A Support.

8 Q The sixth one, and sorry to keep

9 badgering you here, is to amend to authorize

10 the committee to increase the capacity of its

11 financial reserve funds. Are you in support

12 of that?

13 A Support.

14 Q And could you tell me why for that

15 one? Is there something about that one?

16 A There's, in my view, there's two

17 reasons. One is, you know, our shipments have

18 been going down each year. We're working into

19 our reserve. Our reserve right now, we have

20 enough reserve to get us just past the mid

21 point of this coming season. And with the

22 disease, and not knowing where we're going to

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1 go in total shipments, that could continue to

2 drop somewhat. So it would be prudent for us

3 to start, if we can, build up our reserves.

4 And then, also, the second reason

5 would be if we do see where we want to look at

6 some scientific research or marketing research

7 or advertising programs, we would have a

8 reserve to go ahead and implement those

9 programs.

10 Q The seventh proposal is to amend,

11 to authorize pack and container requirements

12 for domestic shipments and authorize different

13 regulations for different markets. Are you in

14 support or not?

15 A Support.

16 Q Now, I do have a question about

17 that. Why is that necessary, different

18 regulations for different markets? Why would

19 you think that to be necessary?

20 A In Florida you have, the CAC is

21 the fresh fruit side of the industry. The

22 Florida Department of Citrus is the fresh and

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1 the processing side. So, if anything changes,

2 as mentioned earlier, at the Department of

3 Citrus, which I don't think we really

4 anticipate right now, the length of time it

5 takes to get these amendments through and

6 authorize and everything, it takes years.

7 So we decided that, since we're

8 going to go ahead and amend it anyway, let's

9 bring in everything that we would possibly

10 need so we could govern the whole fresh fruit

11 side of the industry, whether we need it right

12 now or not.

13 Q Okay, and finally, the last

14 amendment proposal is to amend 905.7 to

15 require handler to register with the

16 committee. Are you in support of that?

17 A Support, yes.

18 Q All right, that's all I have.

19 Thanks.

20 JUDGE CLIFTON: Who else has

21 questions for Mr. Genke? Let's start, again,

22 with USDA people. Mr. McFetridge.

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1 EXAMINATION

2 BY MR. MCFETRIDGE:

3 Q Marc McFetridge, USDA. I just had

4 one quick question for the three proposals

5 that you discussed, No. 4, 5, and No. 8. Can

6 you foresee any possible way that these

7 proposals could cause any type of undue burden

8 on any small agricultural growers or shippers?

9 A No, not at all. I think, on the

10 contrary, it's going to be a benefit,

11 especially on the nominating where, now, the

12 grower is required to vote in person. You

13 know, time constraints or travel constraints

14 might, you know, put a burden on them to have

15 to vote in person. Thus, we don't get the

16 participation we would like to see. So no,

17 not at all.

18 Q Thank you. That's all.

19 JUDGE CLIFTON: Mr. Chadwell?

20 MR. CHADWELL: Arthur Chadwell.

21 I'd just like to add a comment. Excuse me.

22 We have eight shipper members, and each with

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1 an alternate, so 16. And we have the largest

2 shipper member to the smaller shipper, one of

3 the smallest shipper regulated shipments. So

4 we have a great diversity amongst our shippers

5 from the very largest to almost on of the

6 smallest. So we have encompassed shippers of

7 all sizes are members of the committee.

8 JUDGE CLIFTON: Who else has

9 questions for Mr. Genke? Ms. Schmaedick, do

10 you?

11 MS. SCHMAEDICK: Yes, thank you,

12 Your Honor.

13 EXAMINATION

14 BY MS. SCHMAEDICK:

15 Q Melissa Schmaedick, USDA. Mr.

16 Genke, according to your statement, you're the

17 director of sales and marketing for the

18 shipper packers of Indian River. Is that

19 correct?

20 A That's correct.

21 Q I'd like to, if you would, expand

22 on your position on Proposal No. 9, which is

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1 handler registration. You did state that you

2 were in favor of that proposal.

3 A I'm probably the wrong one to ask

4 that, Melissa, because we grow and pack one

5 hundred percent of our fruit. We don't have

6 outside shippers, outside growers.

7 Q Okay. All right, thank you for

8 that clarification.

9 A Okay, thank you.

10 Q No further questions.

11 JUDGE CLIFTON: Ms. Varela.

12 EXAMINATION

13 BY MS. VARELA:

14 Q Jennie Varela, USDA. Mr. Genke, I

15 have kind of a different question for you. A

16 few years ago, the committee moved toward, and

17 you spoke about this a little, toward having

18 meetings via conference calls and kind of

19 changing the way you did business that way.

20 Do you, first of all, did you see more

21 participation in meetings when you made that

22 change?

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1 A Yes. I would say our

2 participation the last couple years on

3 conference calls has been real good. When you

4 have to, I mean, we're from Vero Beach all the

5 way up to the northern part of the state. And

6 you want to have a meeting over in Lake Wales,

7 it's hard for a lot of people to do that,

8 especially during our shipping season which

9 is, you know basically, from October through

10 April, into May as our shipping season.

11 Trying to get out of the office and drive 120

12 miles and back in a day, it makes it very

13 difficult. So, yes, it has increased a lot.

14

15 Q And having been through that, do

16 you anticipate that making some of these

17 changes to the nomination process will have a

18 similar effect? That you'll see that big a

19 difference in participation?

20 A I think it will. Plus, also, the

21 fresh grower mailing list. I think that's

22 very important, because right now we don't

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1 know that it's all getting out to them. Some

2 may be receiving it, some may not. A lot of

3 processors may be receiving the information.

4 So, if we can target it down to just fresh

5 fruit growers, tailor make all our programs,

6 or tailor make our message to them so they get

7 it, yes, I think you'll see greater

8 participation.

9 Q Thank you.

10 JUDGE CLIFTON: Who else at USDA

11 has questions for Mr. Genke? All right,

12 anyone else in the room, do you have questions

13 for Mr. Genke? Stay where you are, and we'll

14 deal with the exhibits.

15 THE WITNESS: I'm not picking up

16 my stuff yet.

17 JUDGE CLIFTON: Exhibit 16 and

18 Exhibit 17 are sample ballots. Let's start

19 with those.

20 THE WITNESS: Okay.

21 JUDGE CLIFTON: Is there any

22 objection to the admission into evidence of

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1 either Exhibit 16 or 17?

2 (No response.)

3 JUDGE CLIFTON: There is none.

4 Exhibit 16 is admitted into evidence. Exhibit

5 17 is admitted into evidence. Exhibit 18 is

6 the form required by USDA, and I guess I need

7 a clarification here, if you will, Mr. Genke.

8 Exhibit 18 is what is filled out when a person

9 agrees to be nominated. Is that correct?

10 (Whereupon Exhibit Nos.

11 16 and 17 were received

12 into evidence.)

13 THE WITNESS: After they're

14 nominated, they would be filling this out to,

15 well, I guess it would be after they're

16 nominated, correct, Duke?

17 JUDGE CLIFTON: Let's get some

18 help. Mr. Chadwell, what do you know about

19 this form?

20 MR. CHADWELL: Arthur Chadwell.

21 We have our nomination process. And then,

22 once the nominees are, we have them nominated,

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1 then we give, this form is submitted to the

2 secretary. And it's to aid the secretary so

3 he has some background information on our

4 nominees, and to make sure that they are

5 qualified. And just some background

6 information of who he is approving to be on

7 the committee.

8 So it's an informational form

9 that, after they are nominated by growers

10 nominating growers, shippers nominating

11 shippers. We complete our nominating process.

12 I send out a copy of the background statement.

13 It is completed by those that have been

14 nominated. Then it is submitted to the

15 Secretary of Agriculture, because it is the

16 Secretary of Agriculture that selects the

17 order.

18 We present the order to the

19 secretary. This is an informational package

20 saying that they agree to serve. And then

21 it's the secretary that appoints them or

22 selects them to the committee.

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1 JUDGE CLIFTON: All right, so Mr.

2 Genke, I'll ask you first. The intent would

3 be to keep using Exhibit 18.

4 THE WITNESS: Oh yes, yes.

5 JUDGE CLIFTON: All right, and you

6 agree with that, Mr. Chadwell?

7 MR. CHADWELL: Yes.

8 JUDGE CLIFTON: And then, what is

9 it that will not happen under your proposal?

10 THE WITNESS: Number 19 will not.

11 After the nominee fills out No. 18 and it's

12 submitted to the Secretary of Agriculture, and

13 then the secretary approve them as a member or

14 alternate, No. 19 was mailed to you after

15 that, saying will you agree to serve.

16 But, on the second page of No. 18,

17 when you sign the certification statement, I

18 certify that the information is above is

19 correct and I am willing to serve on the

20 committee. So 19 comes back to you, again and

21 says are you sure? It's like they're given

22 time to back out, but so 19 is kind of

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1 redundant. And that's why we're saying do

2 away with that. We've already stated on No.

3 18, the confidential statement, that we are

4 willing to serve.

5 JUDGE CLIFTON: Okay, so the only

6 thing that Exhibit 19 adds, besides the fact

7 that it's after the person actually is

8 nominated --

9 THE WITNESS: Or is seated, or I

10 mean approved.

11 JUDGE CLIFTON: Yes. Voted in, I

12 guess.

13 THE WITNESS: Yes.

14 JUDGE CLIFTON: Is this other

15 statement that I agree to carry out assigned

16 duties in administering the terms and

17 provisions of the marketing order to the best

18 of my ability. So that would be missing if

19 you eliminated Exhibit 19. Is that correct?

20 THE WITNESS: Yeah, yeah, 19 would

21 be eliminated. That's correct.

22 JUDGE CLIFTON: Okay, so those

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1 words, if they're essential, I don't know

2 what's essential. But those words could be

3 added to this FV-163, I guess, if those are

4 essential words. I don't know if those are

5 essential words. Yes, please, Mr. Nissen.

6 Again, identify yourself, Mr. Nissen.

7 MR. NISSEN: Christian Nissen,

8 Southeast marketing field office. The forms

9 in your hand, those are largely prepared by

10 USDA. So yes, we could make an adjustment to

11 the initial background form to include that

12 other language. These are just the two

13 existing forms as they are, so they read like

14 that. But we definitely could make it an

15 adjustment to encapsulate both of them into

16 one form. Actually, it would be beneficial

17 for them and for us, as well.

18 JUDGE CLIFTON: Oh, this is good.

19 Thank you. All right, first of all, is there

20 any question for this witness about Exhibits

21 18 and 19 before I ask if there's any

22 objection to their being admitted into

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1 evidence? Ms. Schmaedick?

2 EXAMINATION

3 BY MS. SCHMAEDICK:

4 Q Melissa Schmaedick. Mr. Genke,

5 are you aware of any other marketing orders

6 that have gone through the process of

7 combining their nomination and acceptance?

8 A I am not, no.

9 Q Thank you.

10 JUDGE CLIFTON: All right, are

11 there any other questions on these two forms?

12 Is there any objection to the admission into

13 evidence of Exhibits 18 and 19?

14 (No Response.)

15 JUDGE CLIFTON: There is none.

16 Exhibits 18 and 19 are admitted into evidence.

17 Is there any objection to the admission into

18 evidence of Exhibit 20, which is Mr. Genke's

19 testimony?

20 (No Response.)

21 JUDGE CLIFTON: There is none.

22 Exhibit 20 is admitted into evidence. Mr.

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1 Genke, do you have anything to add before you

2 step down?

3 (Whereupon Exhibit Nos.

4 18, 19 and 20 were

5 admitted into evidence.)

6 THE WITNESS: No I do not. Thank

7 you.

8 JUDGE CLIFTON: All right, thank

9 you so much. You may step down. And, do we

10 need short break, or are we ready for the next

11 witness? Ready for the next witness. Who

12 would that be? Mr. Chadwell?

13 MR. CHADWELL: Mr. Raley, Mr.

14 Lindsay Raley, Proposal No. 6.

15 JUDGE CLIFTON: And let's go off

16 record while documents are distributed.

17 (Off the record.)

18 JUDGE CLIFTON: All right, we're

19 back on record at 2:42. I'm going to swear

20 you in in a seated position. Would you raise

21 your right hand?

22 Whereupon,

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1 LINDSAY RALEY,

2 called as a witness herein, having been first

3 duly sworn, was examined and testified as

4 follows:

5 JUDGE CLIFTON: Thank you Please

6 state and spell your name.

7 THE WITNESS: My name is Lindsay

8 Raley, L-i-n-d-s-a-y, R-a-l-e-y.

9 JUDGE CLIFTON: Thank you. I have

10 marked the document that has your name and

11 says testimony Proposal No. 6 as Exhibit 21.

12 You may proceed.

13 (Whereupon Exhibit No.

14 21 was marked for

15 identification.)

16 TESTIMONY BY LINDSAY RALEY

17 THE WITNESS: Thank you, Your

18 Honor. My name is Lindsay Raley. I reside at

19 208 Palmola Street, Lakeland, Florida. I am

20 the treasurer of the Citrus Administrative

21 Committee, otherwise known as the committee,

22 and was a member of the amendment study

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1 subcommittee which recommended the nine

2 proposed amendments to the committee last

3 July.

4 I am also a small grower and

5 president and chairman of the Dundee Citrus

6 Growers Association. Dundee Citrus Growers

7 Association was founded in 1924 as a grower-

8 owned agricultural cooperative with 113 grower

9 members, and two packing houses located in

10 Dundee and Lake Hamilton. Also, members of

11 Dundee Citrus Growers Association are Lake

12 Regional Packing Association, Winter Haven

13 Citrus Growers Association, and Lake Wales

14 Citrus Growers Association.

15 These cooperatives, in the past,

16 operated their own packing houses, but with

17 the reduction of production and fresh

18 shipments, they joined our cooperative to gain

19 efficiencies for all grower members. The

20 majority of grower members of Dundee Citrus

21 Growers Association would meet SBA definition

22 of a small grower, and our packing house would

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1 meet SBA definition of a large shipper.

2 My testimony will be for Proposal

3 No. 6, which would increase the amount of

4 reserves the committee could carry over each

5 fiscal year. We are proposed to amend Section

6 905.42, handlers accounts to read as follows:

7 A) If at the end of a fiscal period, the

8 assessments collected are in excess of

9 expenses incurred, the committee, with the

10 approval of the secretary, may carry over such

11 excesses into subsequent fiscal periods as a

12 reserve provided that funds already in reserve

13 do not exceed approximately two fiscal

14 periods' expenses.

15 Such reserves may be used 1) to

16 cover any expenses authorized by this part,

17 and 2) to cover necessary expenses of

18 liquidation in the event of termination of

19 this part. If any such excess is not retained

20 in reserves, each handler entitled to a

21 proportionate refund shall be credited with

22 such refund against the operations of the

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1 following fiscal period, unless he demands

2 payment of the sum due him, in which case,

3 such sum shall be paid to him.

4 Upon termination of this part, any

5 funds not required to defray the necessary

6 expenses of liquidation shall be disposed of

7 in such a manner as the secretary may

8 determine to be appropriate provided that, to

9 the extent practical, such funds shall be

10 returned, pro rata, to the persons from which

11 such funds were collected.

12 B) The committee may, with the

13 approval of the secretary, maintain in its own

14 name or in the name of its members a suit

15 against any handler for the collection of such

16 handler's pro rata share of the said expense.

17 This amendment will allow the

18 committee flexibility to increase their

19 reserves up to two fiscal periods' expenses.

20 Currently reserves are capped at approximately

21 one-half years' fiscal expense, which is

22 limiting the committee's flexibility to

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1 operate under increased fluctuations in

2 regulated shipments each season.

3 Also, without the authority to

4 increase reserves in the future, the order

5 would be impeded from being a tool used by the

6 fresh segment of the Florida citrus industry

7 to develop and implement projects requiring

8 advertising, promotion or research for the new

9 varieties being developed that will be the

10 future of the fresh citrus industry in

11 Florida.

12 As described above, the new

13 language is for up to two fiscal years'

14 expenses. The fiscal year of the committee

15 begins on August 1st and ends the following

16 July 31st. The fresh citrus season normally

17 begins, in Florida, in late September, with

18 the majority of the fresh shipments occurring

19 by the end of March, with Valencia orange

20 shipments continuing until late May or early

21 June.

22 The Florida fresh shipping season

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1 currently lasts about eight months, with

2 approximately 87 percent of our volume being

3 shipped in six months. In addition, the

4 volume of regulated shipments of fresh citrus

5 from Florida has declined 17 percent in the

6 last five seasons, and 41 percent in the last

7 decade. This season, fresh shipments from

8 Florida are projected to be down another 10

9 percent from just last season.

10 This season's projected 13.2

11 million boxes shipped fresh would be the

12 lowest amount of fresh citrus shipped from

13 Florida since the 1919-1920 season, when

14 Florida's entire citrus crop was utilized in

15 the fresh market. As you can tell from the

16 decline in fresh citrus volume, it is getting

17 more difficult to carry over the amount of

18 reserves needed to fully fund the committee if

19 only one-half of one years' fiscal expenses

20 may be carried as reserves.

21 The committee has tried to avoid

22 assessment increases each year, and would

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1 rather set an assessment rate that would fully

2 fund the committee's operations and build

3 reserves to handle the fluctuations in fresh

4 shipments. Without raising the authority to

5 increase reserves, it will become more

6 difficulty for the committee to avoid

7 assessment rate increases annually, or even

8 during a season.

9 By raising the assessment rate to

10 a level that will properly fund the operations

11 of the committee and build ample reserves to

12 handle the increased fluctuations in fresh

13 shipments can only be arrived by increasing

14 the amount of reserves the committee is

15 allowed to carry over from fiscal year to the

16 next fiscal year.

17 The committee did consider going

18 up to one full fiscal year's reserve, but felt

19 there is too much variation in regulated

20 shipments for only increasing reserves to one

21 fiscal year's expenses. Also, it has been the

22 practice of the committee to hold excess

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1 assessments during the past few fiscal years

2 to ensure there would be ample reserves to

3 fully fund their operations.

4 During the past year, when we

5 reviewed and considered this change to Section

6 905.42, there was complete support within the

7 fresh segment of the Florida citrus industry.

8 As I have previously stated, there has not

9 been any opposition to this proposal and, in

10 fact, is a cornerstone of the committee's

11 financial stability moving forward until the

12 above-mentioned problems are solved and there

13 is a reassurance of new plantings of varieties

14 with the characteristics desired by consumers

15 of Florida fresh citrus.

16 The order will be the tool for our

17 fresh industry to fully utilize, to move

18 forward as we overcome as many obstacles as

19 our industry currently is working to overcome.

20 The Florida citrus industry has been a

21 cornerstone of Florida agriculture for many

22 decades, and we believe the future is bright

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1 as we retool for the future.

2 The increased reserve ceiling

3 would be in effective immediately.

4 Particularly, it would be implemented with the

5 executive committee recommends its annual

6 budget to the full committee early each fall.

7 Thank you, and that's my testimony.

8 JUDGE CLIFTON: Thank you, Mr.

9 Raley. Who would like to ask questions of Mr.

10 Raley, beginning please with USDA employees.

11 Ms. Schmaedick.

12 EXAMINATION

13 BY MS. SCHMAEDICK:

14 Q Thank you for your testimony.

15 This is Melissa Schmaedick with USDA. Mr.

16 Raley, earlier in the day I believe there was

17 a comment that indicated that reserves had

18 been drawn down over the last year. Is that

19 correct?

20 A That is correct.

21 Q And then, in your testimony on

22 Page 3, you indicate that the committee has

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1 tried to avoid assessment increases. I'm

2 wondering if you could explain how, without

3 assessment increases, you might be able to

4 continue to build reserves, if they're in the

5 process of being depleted?

6 A Well currently, I mean I believe,

7 up until last year our assessments have been

8 very level and, Duke remind me, prior to this

9 past year, it's at 8.8.

10 MR. CHADWELL: $7.2 million.

11 THE WITNESS: $7.2 million. You

12 know, well, we had increased volume. Our

13 expenses at the committee have been, for the

14 past 10 seasons, have averaged about $230,000,

15 and have been that level through that whole

16 time. So the ability to build reserves has

17 been, really, based on volume of shipments in

18 any one year. And with the last few years,

19 they've been declining, declining, declining.

20 So, without raising, we've been eating into

21 reserves each year. And without raising the

22 assessment rate, there's really no way to

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1 maintain any reserves. I hope that answers

2 your question.

3 BY MS. SCHMAEDICK:

4 Q So would you potentially foresee,

5 at some point in the future, increasing

6 assessments in order to build reserves?

7 A I would, yes. No, absolutely,

8 absolutely, I would see. And this only gives

9 the committee the ability to take the reserves

10 up to two year. It doesn't, necessarily, mean

11 that we would take it up to two years.

12 Q If I understand your statement

13 correctly, are you indicating that this

14 ability to have a larger reserve might assist

15 the industry in sort of riding through this

16 bumpy next five years that you foresee?

17 A Yes I do. And also, especially if

18 the committee chooses, in the future, we have

19 the ability to do marketing, advertising and

20 research. Those are types of programs that

21 really need a consistency in funding. And I

22 wouldn't think the committee would want to

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1 commit itself to those types of programs,

2 unless they had a built-in reserve program

3 that could continue those programs.

4 If we had, you know, it doesn't

5 have to be disease related. It could be a

6 freeze or a weather event that takes our

7 assessments down for even just one year. To

8 have those reserves built in would be, I

9 think, just a prudent business decision.

10 Q Thank you. And in you current

11 role as president and chairman of the Citrus

12 Grower Association, which I believe you state

13 is a cooperative, are you speaking on behalf

14 of your small grower members?

15 A I'm speaking as chairman of the

16 committee of the Citrus Administrative

17 Committee. That's my role here.

18 Q And would it be fair to say that

19 you've discussed this issue with your members?

20 A Yes, yes, and there's widespread

21 support.

22 Q Thank you. Have the other

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1 proposals been widely discussed with your

2 members?

3 A Not directly through

4 communications from Dundee Citrus Growers

5 Association, but certainly through the

6 industry at large. I believe all growers got

7 notification of this meeting and, you know, a

8 lot of us serve on multitudes of different

9 industry committees that, you know, this has

10 been well discussed within the industry for

11 the past couple years.

12 Q You also stated that you,

13 yourself, are a small grower by SBA

14 definition.

15 A I would be classified as a large

16 grower for the SBA.

17 Q Oh, is that --

18 A I would just say that the majority

19 of Dundee's members are probably small

20 growers. We have a lot of small, and some

21 large growers, also. But, I would say the

22 majority of our members are small grower

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1 classification.

2 Q In your testimony on Page 1, it's

3 the second sentence, it says I am also a small

4 grower. Does that need to be corrected?

5 A Well, I didn't, is that under, is

6 a small grower in the definition of SBA or,

7 okay, then I would think. What was the cap on

8 that?

9 JUDGE CLIFTON: Let's go off

10 record just a minute.

11 (Off the record.)

12 JUDGE CLIFTON: All right, we're

13 back on record at 2:57. Mr. Raley, you may

14 respond to Ms. Schmaedick's question.

15 THE WITNESS: This is a bit of an

16 oversight on my part. I would be classified

17 as a large grower under those terms.

18 MS. SCHMAEDICK: Thank you.

19 JUDGE CLIFTON: And let's correct

20 that on Exhibit 21, Ms. Bright. The fourth

21 sentence, or the fourth line. How do you want

22 it to read, Mr. Raley?

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1 THE WITNESS: I'm also a large

2 grower.

3 JUDGE CLIFTON: Okay.

4 THE WITNESS: I mean, I think that

5 would meet the, or maybe I should be defined

6 as that I'm just a grower and not put me in a

7 box.

8 BY MS. SCHMAEDICK:

9 Q And one last question for you.

10 Does your packing, I guess you have two

11 packing houses? Could you clarify for me?

12 A Dundee Citrus Growers Association

13 operates two packing houses, yes ma'am.

14 Q Correct. And do you ship outside

15 of the state of Florida?

16 A Yes we do.

17 Q What is your position on Proposal

18 9, handler registration?

19 A I'm very much in support of it.

20 Q Could you tell me why?

21 A I think our organization would

22 probably be just a good example. We have,

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1 we're what's called a federated cooperative.

2 We have cooperatives that are members of our

3 cooperative. Those cooperatives, the other

4 three listed here, have their own individual

5 grower members. Some of those grower members

6 are also members of Dundee Citrus Growers

7 Association. There's a lot of duplication in

8 the industry with, especially, the fresh side

9 of the industry.

10 I think by having the, you know,

11 this kind of "master grower list," we'll

12 eliminate that duplication. And you would

13 have duplication just out of our own

14 organization because we have members that are

15 members of more than one cooperative.

16 Q Thank you. Are you familiar with

17 the other potential impacts of Proposal 9,

18 handler registration?

19 A Familiar with other impacts or any

20 other --

21 Q Would there be any other potential

22 impacts?

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1 A I do not see any.

2 Q Thank you.

3 JUDGE CLIFTON: Are there other

4 questions for Mr. Raley from USDA employees?

5 EXAMINATION

6 BY MR. HILL:

7 Q Brian Hill. I'm going to give you

8 the shortened version.

9 A Okay.

10 Q So, I'll just ask you have you had

11 a chance to look at all of the proposals

12 sometime in the past?

13 A Not directly from the Federal

14 Register, no.

15 Q Right, but just having discussed

16 them.

17 A Yes.

18 Q Talked to other people.

19 A Yes.

20 Q And what is your opinion on just,

21 generally, on the proposals?

22 A I support all of them.

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1 Q You do support all of them.

2 A I do.

3 Q All right, that's all I wanted to

4 know. Thank you.

5 JUDGE CLIFTON: Who else has

6 questions for Mr. Raley? Mr. McFetridge.

7 EXAMINATION

8 BY MR. MCFETRIDGE:

9 Q Marc McFetridge, USDA. Mr. Raley,

10 I just have a few questions. Now, Proposal 6

11 is talking about increasing the fiscal

12 reserves, and there is this number of two

13 years being in the proposal. Is it possible

14 that if the committee decides they could

15 increase it to three to four, or is this two

16 year going to be written in as a hard number

17 that would have to go through an amendment

18 process? Or could it be changed through,

19 informally?

20 A As far as I know, it cannot be

21 changed informally. Once it's set at two

22 years, it would be at two years.

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1 Q All right, thank you. And you

2 stated that you're also the treasurer of the

3 committee?

4 A Currently, yes.

5 Q Could you explain to the USDA the

6 process to use committee funds? What is like

7 the checks and balances that the committee

8 uses so that one person can't just write,

9 basically, a check to purchase a boat or

10 things of that nature?

11 A Well, we have very strict

12 procedures and policy that are in place.

13 We've been audited by the USDA under, I don't

14 know which group came in and audited the

15 committee, but I believe it was someone from

16 MOAD. Currently, our check signing requires

17 more than one signature, so one individual

18 couldn't go buy their boat.

19 We're audited by an outside

20 independent CPA firm. The committee has a

21 finance committee that recommends the budget

22 to the full committee each year. Duke, do you

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1 want to add anything to that? I mean, I think

2 that's really about all I can answer to that.

3 JUDGE CLIFTON: Did he say Duke?

4 THE WITNESS: I'm sorry, Mr.

5 Chadwell.

6 JUDGE CLIFTON: Arthur, who's also

7 known as Art is also Duke?

8 MR. CHADWELL: Duke. Nobody knows

9 me as Arthur.

10 JUDGE CLIFTON: Just Duke.

11 THE WITNESS: Just Duke.

12 JUDGE CLIFTON: All right, would

13 you like to add anything to that, Mr.

14 Chadwell?

15 MR. CHADWELL: Arthur Chadwell, we

16 do have an internal control policy that is

17 reviewed and updated annually by the

18 committee, as well as a compliance claim, and

19 in the internal policy, as Mr. Raley

20 indicated, dual signatures is a safeguard.

21 Requiring an audit each year. And then, we

22 just went through a federal audit last

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1 November sometime. So, we are audited

2 annually. We have internal control policies

3 in place, the dual signatures on both checks

4 and deposits. So we're pretty locked down as

5 far as our internal controls for managing

6 funds.

7 MR. MCFETRIDGE: Thank you.

8 BY MR. MCFETRIDGE:

9 Q Quick question, so if this

10 proposal goes through, and it's approved by

11 the secretary, what would the calculation be

12 to determine what the average two years could

13 be for the fund? Would it be the last three

14 years, the last five years, or --

15 JUDGE CLIFTON: Mr. Raley, do you

16 want to take a crack at that?

17 THE WITNESS: Well, I mean, it

18 would be the past two years.

19 BY MR. MCFETRIDGE:

20 Q The past two years.

21 A I would imagine. And, like I

22 said, our expenses have been extremely level

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1 for the last 10 years. So it'd be pretty easy

2 to determine.

3 Q Okay.

4 JUDGE CLIFTON: And, Mr. Chadwell,

5 did you want to add to that?

6 MR. CHADWELL: Yes, it would be

7 the previous two years, as Mr. Raley said.

8 BY MR. MCFETRIDGE:

9 Q Would this specific proposal

10 warrant an increase in the assessment rate, or

11 is that just a possibility that could happen

12 in the future?

13 A I don't believe this proposal,

14 specifically, will warrant an increase. I

15 think just the declining volume in the

16 industry will warrant an increase of

17 assessments. I don't think this, this would,

18 you know, this proposal itself, necessarily,

19 wouldn't cause an increase.

20 Q Thank you. My final question.

21 Proposal 6, can you foresee any possible way

22 that this would cause any type of undue burden

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1 onto any small growers or shippers?

2 A I do not.

3 Q Thank you.

4 JUDGE CLIFTON: Who else at USDA

5 has questions for Mr. Raley? Who else in the

6 room has questions for Mr. Raley? Mr. Raley,

7 was there anything you wanted to add?

8 THE WITNESS: No ma'am, not at

9 this time.

10 JUDGE CLIFTON: Is there any

11 objection to the admission into evidence of

12 Exhibit 21?

13 (No response.)

14 JUDGE CLIFTON: There is none.

15 Exhibit 21 is admitted into evidence. Thank

16 you, Mr. Raley.

17 (Whereupon Exhibit No.

18 21 was received into

19 evidence.)

20 THE WITNESS: Thank you. My

21 pleasure.

22 JUDGE CLIFTON: Let's take a

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1 10-minute stretch break, nine minute. Please

2 be back and ready to go at 3:15.

3 (Off the record.)

4 JUDGE CLIFTON: We're back on

5 record at 3:16. I want everyone to be aware

6 that there are a couple of contacts we need to

7 make before long. One is there is a gentleman

8 who is willing to stay if we need to work a

9 little longer in order to finish. We can stay

10 as late as 6:00. And my understanding is that

11 if we stay after 5:30, he's doing extra work

12 for us, and he's willing to do it. So, fairly

13 soon, we should try to communicate to him

14 whether we expect him to stay until 6:00.

15 The other is the company that will

16 be picking up our amplification equipment and

17 taking it back to Orlando would kind of like

18 to know whether we're going to be using it

19 tomorrow. And so, we're welcome to, but

20 they'd like to know. So, as we get a little

21 longer in the afternoon, help me try to

22 calculate whether we're going to be back here

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1 tomorrow. And now's the time to get this

2 done. If we need tomorrow, that's fine with

3 me. But we just need to touch base with these

4 folks who would be helping us. So, I'll ask

5 you in about an hour where do you think we

6 are.

7 All right, I'm going to swear in

8 you seated. Would you raise your right hand,

9 please?

10 Whereupon,

11 EMERY SMITH, II,

12 called as a witness herein, having been first

13 duly sworn, was examined and testified as

14 follows:

15 JUDGE CLIFTON: Thank you Please

16 state and spell your name.

17 THE WITNESS: My name is Emery

18 Smith, II, E-m-e-r-y, S-m-i-t-h.

19 JUDGE CLIFTON: Thank you, and I

20 have marked the document that says Emery Smith

21 testimony, Proposal No. 3, redistricting, as

22 Exhibit 22. You may proceed.

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1 (Whereupon Exhibit No.

2 22 was marked for

3 identification.)

4 TESTIMONY BY EMERY SMITH, II

5 THE WITNESS: Thank you. Again,

6 my name is Emery Smith. I reside at 2851 S.

7 Lake Leta Drive in Avon Park, Florida. I

8 serve on the executive committee of the

9 Florida Citrus Packers and the board of

10 directors of the Highlands County Citrus

11 Growers Association. I am not on the Citrus

12 Administrative Committee, but our company

13 works closely with the committee and utilizes

14 their statistical information.

15 I am the vice president of Citrus

16 Marketing and Industry Relationship for Ben

17 Hill Griffin, Inc., a vertically integrated,

18 family-owned citrus operation. And my family

19 is also engaged in citrus production. Ben

20 Hill Griffin, Inc. is one of the larger

21 growers of Florida citrus with groves located

22 in multiple counties within the production

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1 area of Florida.

2 We also operate a packing house

3 and market our fruit mainly to the domestic

4 market. Ben Hill Griffin, Inc. groves and

5 packing house would meet the SBA's definition

6 as a large grower shipper. Ben Hill Griffin,

7 Inc. has been growing and shipping fresh

8 citrus in Florida for more than 60 years. Of

9 citrus produced by Ben Hill Griffin, Inc., the

10 majority of our fruit is produced for the

11 process market, but the fruit produced for the

12 fresh market is a very important component of

13 our overall citrus operation.

14 As a fresh fruit grower, we think

15 it's important Florida's fresh growers have

16 the order's grower districts better defined so

17 those Florida citrus growers producing citrus

18 for the fresh market are fairly represented on

19 the committee. Proposal No. 3 would change

20 Section 905.14, redistricting, to read as

21 follows: The committee may, with the approval

22 of the secretary, redefine the districts into

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1 which the production area is divided, so re-

2 apportion or otherwise change the grower

3 membership of the districts or both, provided

4 that the membership shall consist of at least

5 eight, but not more than nine, grower members.

6 And any such change shall be

7 based, so far as practical, upon the

8 respective averages for immediately preceding

9 three fiscal periods of 1) the number of

10 bearing trees in each district, 2) the volume

11 of fresh fruit produced in each district, 3)

12 the total number of acres in each district,

13 and 4) other relevant factors. Each

14 redistricting or re-apportionment shall be

15 announced or prior to March 1 preceding the

16 effective fiscal period.

17 The proposal to remove the time

18 frame for redistricting, and to base any

19 changes on three fiscal periods of 1) number

20 of bearing trees in each district, 2) volume

21 of fresh fruit produced in each district, 3)

22 total number of acres in each district, and 4)

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1 other relevant factors would allow the

2 committee to redistrict grower districts as

3 often as factors within the production area

4 mandate.

5 Due to the major declines in

6 bearing tree numbers, production and fresh

7 shipments, the Florida citrus industry has

8 experienced over the past decade, this

9 proposal would allow the committee to

10 determine grower districts on a timely basis

11 based on these factors. The authority under

12 the order to redistrict on an established time

13 frame every fifth year, with the factors

14 outlined in Section 905.14, redistricting, the

15 committee has, in the past, redistricted

16 grower districts when warranted under the

17 current provisions of Section 905.14.

18 The committee has compared five

19 years of data on acreage, shipments and

20 production. However, given the increased loss

21 of trees per acre due to disease pressure and

22 natural disasters, the current guideline for

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1 calculating grower districts using acreage is

2 no longer an applicable method to determine

3 grower districts. The new industry standard

4 is to consider bearing trees, not acreage,

5 when calculating production capacity within a

6 county or grower district.

7 Due to heavy tree loss within

8 producing groves, acreage is not a reliable

9 indicator of production, as too many groves

10 have anywhere from 10 percent to as much or

11 more than 50 percent of their grove acreage

12 with non-bearing trees or no trees at all. It

13 is the bearing trees that produce our crops,

14 and utilizing them for calculating production

15 is a more reliable indicator of production.

16 It must be noted the Florida

17 citrus industry pays an assessment on each box

18 of citrus to help fund the Florida

19 Agricultural Statistical Service to not only

20 provide crop estimates every season, but an

21 accurate tree census every other year.

22 Therefore, the committee has an accurate and

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1 up-to-date census of bearing trees, by variety

2 and county, to utilize in the redistricting of

3 grower districts.

4 As previously noted, the Florida

5 citrus industry utilizes 90 percent or more of

6 its annual production to produce processed

7 products. During the last complete season of

8 2011-'12, approximately two percent of the

9 early-mid and Valencia orange crop was

10 utilized for fresh shipments. Which means

11 that 98 percent of the round orange crop is

12 utilized for the production of processed

13 products.

14 Therefore, when these varieties'

15 production are used by county, it skews the

16 volume to process utilization, and is not

17 reflective of fresh volume. Therefore,

18 calculating fresh volume can best be arrived

19 at by taking the fresh fruit varieties, those

20 varieties that return the grower an on-tree

21 value that exceeds cost of product, and using

22 their bearing trees per county to calculate

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1 fresh volume is much more representative of

2 fresh growers per county.

3 It should be noted the varieties

4 we will be using are Navel oranges, red and

5 white grapefruit, specialty citrus varieties,

6 Fall-Glo tangerines, Sunburst tangerines,

7 Tangelos, honey tangerines. Tables 1(a), 2,

8 3, 4, and 5 illustrate these points.

9 The committee determined, in their

10 deliberations, that implemented the proposed

11 changes would allow the committee, in future

12 seasons, the flexibility to adjust grower

13 districts to reflect the shift in production

14 of fresh varieties and fresh volume. In

15 addition, we foresee the continued loss of

16 trees and fresh volume, and the shift in

17 varieties that make up our industry's

18 composition of fresh shipments.

19 The committee, having the

20 authority to constitute grower districts

21 according to where the fresh fruit product is

22 will better serve the growers of fresh fruit.

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1 On a positive note, as our industry begins to

2 plant with new fresh fruit varieties/hybrids,

3 and fresh fruit volume is increased with new

4 and improved production practices currently be

5 addressed by the USDA and IFIS researchers

6 that combats greening and canker, the

7 committee will be positioned to adjust grower

8 districts as they evolve in the future.

9 In closing, the fresh segment of

10 our industry has been very supportive on this

11 proposal. It has been stated more than once

12 today this proposal will give the Florida

13 citrus grower of fresh fruit a tool in the

14 toolbox to better administer the order for the

15 benefit of growers.

16 JUDGE CLIFTON: Thank you, Mr.

17 Smith. Who has questions for Mr. Smith,

18 starting with USDA employees? Ms. Schmaedick.

19 MS. SCHMAEDICK: Thank you, Your

20 Honor.

21 EXAMINATION

22 BY MS. SCHMAEDICK:

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1 Q Thank you, Mr. Smith, for your

2 testimony. On Page 3 of your testimony, you

3 refer to some tables, Tables 1(a), 2, 3, 4 and

4 5. It's mentioned at the bottom of that

5 middle paragraph.

6 A I believe those were the tables

7 from Mr. Chadwell's testimony in the very

8 beginning.

9 Q Okay, thank you. That was just my

10 question for clarification.

11 A Sure.

12 Q And then, you mentioned, on Page

13 2, you're discussing the need to include

14 bearing acres. Is that correct? Bearing

15 trees.

16 A Bearing trees versus acres.

17 Q Correct, sorry, thank you. My

18 question is how would a newly planted tree be

19 counted? I believe earlier in the day we

20 heard that it took about five years for a tree

21 to become fully productive.

22 A That's correct. Initially, a new

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1 planting is classified as non-bearing. And

2 after so many years, it is put into the

3 bearing category. I think three or four years

4 is the time frame. The first couple of years,

5 it is still considered non-bearing, which we

6 do have a number of acres in that category

7 today from trees that were removed from canker

8 that have been reset and are still non-

9 bearing.

10 Q Thank you for that clarification.

11 And, just to, I guess, to focus on other

12 proposals, other than Proposal No. 3, are you

13 aware of, in general, the other proposals

14 being proposed today?

15 A Yes.

16 Q And are you supportive of those?

17 A Yes.

18 Q To what extent have you been

19 involved in the development of these

20 proposals?

21 A I'm, as I stated, I'm not on the

22 committee, but attend the committee meetings.

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1 And, as a fresh grower and shipper, we're

2 involved with the rule making that the

3 committee develops.

4 Q And are you aware of outreach

5 activities to educate the industry at large

6 about the proposals?

7 A I think, as has been stated, many

8 of us serve on a number of committees, so

9 these things kind of work their way around as

10 different meetings take place.

11 Q So, in your opinion, it's fairly

12 widely known throughout the industry?

13 A Yes.

14 Q What's being proposed today.

15 A Yes.

16 Q Thank you. No further questions.

17 JUDGE CLIFTON: Who else has

18 questions for Mr. Smith. Mr. McFetridge.

19 EXAMINATION

20 BY MR. MCFETRIDGE:

21 Q Mr. Smith, just one quick

22 question. For Proposal No. 3, redistricting,

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1 can you foresee any undue burden that would be

2 placed on any small growers or handlers?

3 A No I don't.

4 Q You stated here that Ben Hill

5 Griffin, Inc., that's where you are a grower

6 for them?

7 A I work for Ben Hill Griffin.

8 Q You work for them. As an employee

9 for them, how do you feel about Proposal 9

10 about grower sign-ups?

11 A I think that would also be

12 beneficial. That we have, the majority of our

13 fruit is company-owned that we pack. But we

14 do have outside growers that we handle fruit

15 for. So some of, I mean, other than our

16 communication, some of those growers would

17 not, necessarily, be aware of meetings,

18 notices and so forth. So, by having that

19 comprehensive list to make sure you're

20 targeting all of those folks, I think that

21 would be an improvement.

22 Q Thank you very much.

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1 JUDGE CLIFTON: Who else from USDA

2 has questions of Mr. Smith? Who else in the

3 room has questions of Mr. Smith? Ms.

4 Schmaedick.

5 BY MS. SCHMAEDICK:

6 Q Mr. Smith, you just, I believe

7 spoke to Proposal No. 9, handler registration.

8 Is that correct?

9 A Yes.

10 Q Are you aware of any other impacts

11 that a handler registration authority would

12 have on the industry?

13 A No, other than just increased

14 communication of proposals and meetings for

15 the committee.

16 Q Are you aware of what the

17 functionality of a handler registration might

18 be for purposes other than information

19 gathering?

20 A I'm not sure I follow. As far as?

21 Q For example, would a handler

22 registration, could it, theoretically, be used

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1 as a compliance tool?

2 A I don't think so. I mean, I

3 think, I think it would be beneficial to

4 ensure, but as a shipper, you know your own

5 growers. So, if there's a compliance issue,

6 you're going to make sure your own growers are

7 in compliance with whatever the rules might

8 be. So, maybe that's handled more

9 individually. I don't know if, by gathering

10 that information through the handlers of the

11 individual growers, if that would be a help.

12 I guess it would depend on what the issue was.

13 Q Could you foresee handler

14 registration being a compliance tool for

15 ensuring that handlers comply with assessment

16 rules?

17 A Yes, I think that would, you would

18 be ensuring that everyone's covered. That

19 everyone is accounted for.

20 Q And, in your opinion, is that a

21 good idea?

22 A I think you want to make sure

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1 you're capturing all the growers that should

2 be participating as fresh growers, yes.

3 Q And your opinion on capturing the

4 participation of handlers and assessments?

5 A Yes, that you would, I mean, the

6 more accountability of having all growers

7 involved, I think, is better.

8 Q Thank you. No further questions.

9 JUDGE CLIFTON: Are there other

10 questions for Mr. Smith from anyone in the

11 room?

12 (No response.)

13 JUDGE CLIFTON: Is there any

14 objection to the admission into evidence of

15 Exhibit 22?

16 (No response.)

17 JUDGE CLIFTON: There is none.

18 Exhibit 22 is admitted into evidence. Mr.

19 Smith, is there anything else you'd like to

20 add?

21 (Whereupon Exhibit No.

22 22 was received into

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1 evidence.)

2 THE WITNESS: No ma'am.

3 JUDGE CLIFTON: All right. Thank

4 you so much.

5 THE WITNESS: Thank you.

6 JUDGE CLIFTON: You may step down.

7 And, Mr. Chadwell, who will be the next

8 witness?

9 MR. CHADWELL: It would be

10 Proposal No. 1, variety development.

11 JUDGE CLIFTON: Do you want to

12 deal now with the testimony of the gentleman

13 who had to leave, Mr. Chaires?

14 MR. CHADWELL: Yes.

15 JUDGE CLIFTON: All right. Who

16 would like to handle that?

17 MR. HUNT: Yes, if I could, I was

18 going to read Mr. Chaires's testimony. I am

19 Frank Hunt, III. And I will read in Mr.

20 Chaires's testimony. And then, if I'm

21 correct, then Dr. Gmitter will follow that.

22 And then, I would follow with my testimony,

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1 all in regards to Proposal 1.

2 JUDGE CLIFTON: All right, and

3 we've had some mention of this earlier, but I

4 just want the person who knows best to explain

5 why it is that Mr. Chaires was here this

6 morning when we started.

7 MR. HUNT: Okay, Mr. Chaires spent

8 a couple days in the hospital with pneumonia

9 here, what about a week ago, a little less

10 than a week ago, and was released on Sunday.

11 And so, he was not capable of continuing. We

12 felt like he needed to go. He has respiratory

13 issues from his illness.

14 JUDGE CLIFTON: All right, and why

15 is it that you know that this is his

16 testimony?

17 MR. HUNT: I happen to have it in

18 front of me with his name on it.

19 JUDGE CLIFTON: Who knows, who can

20 establish that this is what he would have

21 provided were he here?

22 MR. HUNT: Okay, Mr. Chaires is

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1 the executive --

2 JUDGE CLIFTON: All right, just a

3 minute. One at a time.

4 MR. HUNT: Mr. Chaires is the

5 executive director of the Florida Citrus

6 Packers, and I serve as president of Florida

7 Citrus Packers, and so we have worked very

8 closely on these testimonies together, along

9 with Mr. Hamner and others.

10 JUDGE CLIFTON: That's very

11 helpful. Thank you. All right, let's go off

12 record while we distribute the testimony of

13 Mr. Chaires.

14 (Off the record.)

15 JUDGE CLIFTON: All right, we've

16 back on record at 3:38. Would you please

17 spell the name of Mr. Chaires?

18 MR. HUNT: Okay. It's J. Peter

19 Chaires, the letter J, and then P-e-t-e-r, C-

20 h-a-i-r-e-s.

21 JUDGE CLIFTON: All right, thank

22 you. And I have marked the document that says

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1 testimony, J. Peter Chaires as Exhibit 23, and

2 it's a five-page document. And you will be

3 reading it into the record. I'd like for you

4 to identify yourself, spell both your names,

5 and remember that you remain under oath.

6 (Whereupon Exhibit No.

7 23 was marked for

8 identification.)

9 Whereupon,

10 FRANK M. HUNT, III,

11 previously called as a witness herein, having

12 been previously duly sworn, testified as

13 follows:

14 THE WITNESS: Yes, okay. I am

15 Frank M. Hunt, F-r-a-n-k, M, H-u-n-t.

16 JUDGE CLIFTON: All right, are you

17 familiar with this testimony that's been

18 marked as Exhibit 23?

19 THE WITNESS: Yes, I am.

20 JUDGE CLIFTON: And do you know

21 that Mr. Chaires intended to present it

22 himself today?

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1 THE WITNESS: Yes, I do.

2 JUDGE CLIFTON: You may proceed.

3 TESTIMONY PRESENTED BY FRANK HUNT

4 ON BEHALF OF PETER CHAIRES

5 THE WITNESS: My name is Peter

6 Chaires, and I reside at 457 Cardinal Oaks

7 Court, Lake Mary, Florida 32746. I serve as

8 executive director of New Varieties

9 Development and Management Corporation, NVDMC.

10 NVDMC is a grower funded, not-for-profit

11 corporation formed in 2005, which is funded

12 through a contract with the Florida Department

13 of Citrus.

14 NVDMC's mission is to support the

15 development of new citrus varieties, identify,

16 acquire and evaluate varieties from other

17 global production areas, serve as a central

18 licensing mechanism for proprietary citrus

19 varieties on behalf of nurseries, growers and

20 packers. Liaison with state and federal

21 agencies in the field of variety development

22 and import procedures, and to assure that

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1 Florida citrus producers have timely and

2 affordable access to new varieties.

3 I also serve as executive vice

4 president of the Florida Citrus Packers, a 53-

5 year old, not-for-profit cooperative

6 association. Florida Citrus Packers

7 represents the interests of commercial packers

8 and shippers of fresh citrus fruit. The

9 organization involves itself in regulatory,

10 legislative, marketing and market access

11 activities. There are presently 29 packing

12 houses within its membership.

13 Proposal No. 1a revises Section

14 905.4 to read as follows: Section 904.4,

15 fruit. Fruit means any or all varieties of

16 the following types of citrus fruits grown in

17 the production area: (a) citrus sinesis,

18 Osbeck, commonly called oranges; (b) citrus

19 paradisi, McFadyen, commonly called

20 grapefruit; (c) citrus reticulata, commonly

21 called tangerines or mandarin; (d) citrus

22 grandis, Osbeck, commonly called pummelo; and

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1 (e) citrus hybrids that are hybrids between or

2 among one or more of the four fruits (a)

3 through (d) of this section and the following:

4 trifoliate orange (Poncirus trifoliate), sour

5 orange (C. aurantium), lemon (C. limon), lime

6 (C. aurantifolia, citron (C. medica), kumquat

7 (Fortunella species), tangelo (C. reticulata

8 crossed with C. paradisi or C. grandis),

9 tangor (C. reticulata crossed with C.

10 sinensis), and varieties of these species.

11 In addition, citrus hybrids

12 include tangelo (C. reticulata crossed with C.

13 paradisi or C. grandis), tangor (C. reticulata

14 crossed with C. sinesis), and temple oranges,

15 and varieties thereof.

16 Proposal 1b would revise 905.5 to

17 read as follows: Section 905.5, variety.

18 Variety or varieties means any one or more of

19 the following classifications or groupings of

20 fruit: (a) oranges, (a)(1) would be early and

21 midseason oranges, (2) Valencia, Lue Gim Gong,

22 or similar late maturing oranges of the

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1 Valencia type, (3) navel oranges.

2 (b) would be grapefruit, red

3 grapefruit, to include all shades of color and

4 white grapefruit. (c) would be tangerines and

5 mandarins which would include (1) Dancy and

6 similar tangerines, (2) Robinson tangerines,

7 (3) Honey tangerines, (4) Fall-glo tangerines,

8 (5) US Early Pride tangerines, (6) Sunburst

9 tangerines, (7) W-Murcott tangerines, and (8)

10 tangors. (d) Pummelos, Hirado Buntan and

11 other pink seeded pummelos. (e) would be

12 citrus hybrids which would be Tangelos,

13 including Orlando Tangelo and Minneola

14 Tangelo, and (2) Temple oranges. (f) other

15 varieties of citrus fruits specified in 905.4,

16 including hybrids, as recommended and approved

17 by the secretary, provided that in order to

18 add any hybrid variety of citrus fruit to be

19 regulated under this provision, such variety

20 must exhibit similar characteristics and be

21 subject to cultural practices common to

22 existing regulated varieties.

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1 New citrus varieties are the

2 lifeblood of our industry. In Florida many of

3 the mainline varieties we have packed and sold

4 for generations have either succumbed to pest

5 and disease challenges, or reached a point of

6 market obsolescence. Florida growers have

7 invested heavily and steadily in the

8 development of new citrus varieties to meet

9 changing demand and consumer preferences.

10 It is imperative that Marketing

11 Order 905 be amended to keep pace with the

12 rapidly changing industry, and to maximize its

13 relevance and utility to the industry. The

14 utilization of varieties in fresh market

15 channels is quite variable. The most recent

16 data indicates that only five percent of

17 Florida round orange production was utilized

18 fresh.

19 However, fresh packed round

20 oranges account for up to 60 percent of the

21 volume of some family-owned Florida packing

22 houses. This fruit is economically

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1 significant for their business. Approximately

2 81 percent of Florida navel oranges are

3 utilized fresh. And though they are not a

4 large part of statewide production, they are

5 very significant to many packing operations

6 and producers.

7 Approximately 50 percent of the

8 Florida red grapefruit crop is now utilized

9 fresh. But we hope to improve on this figure

10 with time. Packing a variety fresh often

11 provides superior returns to the grower, and

12 is the preferred route of utilization for

13 navel oranges, grapefruit and specialty

14 varieties. The ability to regulate fresh

15 shipments protects the interest of growers.

16 The proposed amendment are

17 intended to update order language to expand

18 the definition of fruit and varieties to

19 include new varieties and hybrids of citrus,

20 consolidate fresh citrus regulation, and

21 better reflect current Florida citrus industry

22 operations. Marketing Order 905 was last

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1 amended in 2009. Since that time, there have

2 been many changes within the fresh segment of

3 the Florida citrus industry.

4 The Florida citrus industry

5 continues to contract due to the loss of

6 bearing trees and production, which has been

7 brought about by the effect of two diseases,

8 citrus canker and greening, and natural

9 disasters such as hurricanes. Also, the

10 percent of Florida's citrus crop utilized for

11 fresh shipment has contracted to approximately

12 nine percent of the citrus produced in

13 Florida.

14 During these years, Florida's

15 bearing citrus trees have declined by 29

16 percent, production by 42 percent, and fresh

17 utilization by 45 percent. The loss of

18 production has placed increased pressure on

19 Florida fresh packing operations. In

20 addition, the value of the juice produced by

21 some of the most, some or most of the fresh

22 fruit varieties has continued to decline,

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1 which has further segmented the fresh from the

2 process sector of the Florida citrus industry.

3 The establishment of quality

4 standards supports demand and improves

5 Florida's competition position. To maintain

6 this benefit of the marketing order, the CAC

7 must include new varieties and hybrids as they

8 are developed and gain consumer acceptance.

9 They amendment to include new varieties and

10 hybrids could have a great impact on growers,

11 handlers and consumers by ensuring that new

12 varieties meet the same quality standards

13 applied to current varieties.

14 Without the development of

15 seedless and easy-to-peel varieties and

16 hybrids that can produce in Florida, consumers

17 will seek varieties currently produced in

18 California and imported from Spain, Australia

19 and South Africa. Without new varieties and

20 hybrids, the future for fresh Florida citrus

21 would be in doubt.

22 However, the existence of abundant

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1 land, infrastructure, expertise, and

2 productive breeding programs fuel the belief

3 that the downward trends will be reversed.

4 When new varieties and hybrids are available

5 to the Florida citrus industry, it will be

6 important that the marketing order have the

7 authority to regulate quality and size

8 standards, and that it's language be inclusive

9 of all material likely to emerge from the

10 breeding programs.

11 Finally, the ability to regulate

12 all varieties utilized in fresh channels

13 assures universal participation and support.

14 It is important that all varieties participate

15 in programs related to quality, research and

16 promotion. Universal participation and

17 inclusion assures maximum benefit to the

18 Florida grower.

19 JUDGE CLIFTON: First, I want to

20 ask if there's any objection to Exhibit 23

21 being admitted into evidence due to the fact

22 that Mr. Chaires is not, himself, here for

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1 cross examination. Is there any objection?

2 (No response.)

3 JUDGE CLIFTON: There is none. I

4 admit into evidence Exhibit 23. Mr. Hunt, are

5 you comfortable in answering, or at least

6 attempting to answer any questions that anyone

7 here might have about the statements in

8 Exhibit 23?

9 (Whereupon Exhibit No.

10 23 was received into

11 evidence.)

12 THE WITNESS: With Dr. Gmitter's

13 support here beside me, I'm comfortable trying

14 to answer any questions.

15 JUDGE CLIFTON: Good. All right,

16 let's take it that way, then. First of all,

17 who from USDA has any questions about the

18 content in Exhibit 23? Ms. Schmaedick.

19 MS. SCHMAEDICK: Thank you, Your

20 Honor.

21 EXAMINATION

22 BY MS. SCHAMEDICK:

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1 Q And thank you, Mr. Hunt, for

2 reading in the testimony for your colleague.

3 I was wondering if you could speak to the

4 inclusion of pummelos into the new definition

5 of fruit? Why are pummelos being added?

6 A Well, you know, pummelos is a

7 variety that, it's actually been a minor use

8 variety that's out there. But it is of a

9 citrus type, and pummelos are gaining

10 popularity. And a pummelo is a

11 grapefruit-like fruit. And so, it seemed that

12 pummelos should come under regulation. Dr.

13 Gmitter, would you add anything to that, or is

14 that --

15 DR. GMITTER: The production of

16 pummelo in Florida, as well as in California,

17 is increasing. It's initially been targeted

18 at Asian markets. But there is becoming more

19 and more mainstream interest and acceptance of

20 the variety. You can buy them at Walmart. So

21 pummelo has, in fact, become a player in very

22 recent years.

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1 BY MS. SCHMAEDICK:

2 Q Would this be an example of a

3 fruit that has met or is starting to cross

4 that commercially viable threshold that we

5 spoke of earlier?

6 A I think it would be.

7 Q And, I apologize up front if I,

8 this may seem like a really silly question,

9 but is pummelo its own fruit, or is it a

10 variety of another fruit?

11 MS. SCHMAEDICK: And, perhaps,

12 that might be a better question for you, Dr.

13 Gmitter.

14 DR. GMITTER: Pummelo is a

15 category of fruit. There are a number of

16 different varieties of pummelo that exist in

17 the world. There are white fleshed pummelos.

18 There are red fleshed, pink fleshed, even

19 green fleshed pummelos. So, it's one of the

20 true biological species in citrus, and there's

21 a great diversity in fruit types. But they

22 all would be recognized as distinctive based

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1 on their size. They're a large fruit. Bigger

2 than any other citrus fruit.

3 MS. SCHMAEDICK: Thank you, I

4 appreciate that clarification. So, would that

5 be the reason for including it as a distinct

6 line item, if you will, in the definition of

7 fruit, as well as a specific mention under

8 variety or the potential parentage of future

9 hybrids?

10 DR. GMITTER: They are distinctly

11 different from all other citrus fruit. So, I

12 think it's justified, it's rational that they

13 should be listed as a separate item, in my

14 opinion.

15 MS. SCHMAEDICK: Thank you. I

16 appreciate that. I do have further questions

17 about the proposed definitions and the changes

18 to these two definitions. I'm wondering if I

19 should, Your Honor, if I should just ask them

20 now, or if I should wait for further

21 testimony.

22 JUDGE CLIFTON: Perhaps you should

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1 wait, because we don't know what Dr. Gmitter

2 is going to say. You can always come back to

3 Exhibit 23 to ask questions of him, Mr. Hunt,

4 or anyone else. So, it's up to you. The

5 hardest part will be knowing how to pronounce

6 the question you want to ask.

7 MS. SCHMAEDICK: Thank you for

8 that guidance. I will wait for further

9 testimony. Thank you.

10 JUDGE CLIFTON: All right, would

11 anyone else from USDA like to ask any

12 questions now about Exhibit 23? And you all

13 can wait until you have Dr. Gmitter or Mr.

14 Hunt testifying, and then use Exhibit 23 to

15 ask questions if you'd like. All right, are

16 there any other questions from anyone in the

17 room right now about Exhibit 23? Everyone may

18 bring it up later if you wish. But, are there

19 any questions right now?

20 (No response.)

21 JUDGE CLIFTON: All right, none.

22 Then, Dr. Gmitter, I think you're next.

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1 MR. HUNT: Well, George is

2 throwing us a curve again, Your Honor. He

3 suggested, while I have the mic, to go ahead

4 and read my testimony, and then we'll have Dr.

5 Gmitter, if that would be okay.

6 JUDGE CLIFTON: Certainly, fine.

7 MR. HUNT: I am, basically, just

8 in support of the proposal with my testimony,

9 so I'll go ahead and read that, if that would

10 be all right. And Mr. Chadwell's passing out

11 copies.

12 JUDGE CLIFTON: Okay now, hold on

13 just a second. What he's passing out now is

14 a black and white version of what I had in

15 color attached to Mr. Chaires testimony. So,

16 it's the same, correct?

17 MR. HAMNER: They had them

18 attached --

19 MR. HUNT: I don't know whether it

20 is or not. I assume it is. It looks the

21 same.

22 DR. GMITTER: Yes, they were

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1 attached, yes.

2 JUDGE CLIFTON: Okay. I like the

3 color version myself.

4 MR. HUNT: Okay, Duke, collect

5 that other copy, then.

6 JUDGE CLIFTON: So I'm going to

7 mark the document that has very beautiful

8 letterhead that says Hunt Bros., brothers

9 abbreviated, as Exhibit 24. All right, and

10 Mr. Hunt, although you remain sworn, tell me

11 again your full name and spell it, please.

12 (Whereupon Exhibit No.

13 24 was marked for

14 identification.)

15 Whereupon,

16 FRANK M. HUNT, III,

17 recalled as a witness herein, having been

18 previously duly sworn, testified as follows:

19 THE WITNESS: I'm Frank M. Hunt,

20 III, F-r-a-n-k, letter M, H-u-n-t, III.

21 JUDGE CLIFTON: Thank you. You

22 may proceed.

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1 TESTIMONY BY FRANK M. HUNT, III

2 THE WITNESS: Okay, I reside at

3 803 North Lakeshore Boulevard, Lake Wales,

4 Florida. I am president of Hunt Bros.

5 Cooperative located in Lake Wales, Florida.

6 Hunt Bros. is a closely held family citrus

7 cooperative made up of family members or

8 family-controlled corporations. Hunt Bros.

9 was founded in 1922 by my grandfather, and

10 today we are into the fourth generation of

11 family members working in the business.

12 We are growers, packers and

13 shippers of fresh Florida citrus, producing

14 and packing fresh various varieties of navel

15 oranges, round oranges, tangerines, tangelos

16 and grapefruit. Our fresh fruit is all

17 marketed and sold by Seald Sweet, LLC located

18 in Vero, Florida. Hunt Bros. Cooperative

19 would be considered by the SBA definition, a

20 large grower and shipper.

21 I am currently serving as

22 president of Florida Citrus Packers and am a

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1 charter board member of the New Varieties

2 Development and Management Corporation, of

3 which I am a past president. I currently

4 serve on the committee as a cooperative

5 shipper member.

6 The development and availability

7 of new fresh citrus varieties is of great

8 importance to our family business. Although

9 we see a bright and continued future for many

10 of the varieties we currently pack, it is

11 clear that we also need access to new

12 varieties that meet changing consumer

13 preferences, and that are more robust and able

14 to survive our unique mix of pest and

15 diseases.

16 We recognize that our best hope

17 will be varieties bred in our climate.

18 Because of this, we have invested tremendous

19 time and effort to support variety development

20 and commercialization programs. Shifts in

21 variety demand can change an industry quickly.

22 Thirty years ago, our company packed

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1 substantial quantities of Robinson and Dancy

2 tangerines.

3 Though these were fine varieties

4 for the time, they both fell into disfavor.

5 They were quickly supplanted by Fall-Glo and

6 Sunburst tangerines. Eventually, so few of

7 the Robinson and Dancy varieties were packed

8 that they were both deregulated. Honey

9 tangerines have been packed throughout this

10 time period, but are now seeing an erosion of

11 support.

12 Fast forward to 2012. For the

13 first time in a quarter century, the top two

14 propagated tangerine varieties were not

15 Sunburst or Honeys. There were two new

16 tangerines that are rapidly making inroads.

17 Packers need to be prepared, and the marketing

18 order needs to be prepared. Hunt Bros.

19 intends to plant experimental trials of new

20 easy-peel and seedless varieties in the near

21 future. Those that prove to be the best

22 performers, and which our marketing company

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1 determine meet the demands of consumers, will

2 be planted in greater quantity.

3 Companies that plan to be in this

4 business for the long term must adapt with the

5 times, and we are taking the steps we feel are

6 necessary to position ourselves for long-term

7 success. It is important to Hunt Bros. and

8 the Florida citrus industry that all new

9 varieties emerging from the University of

10 Florida and USDA breeding programs be eligible

11 for regulation under Marketing Order 905.

12 The ability to regulate these

13 varieties will assure our company, and other

14 like us, that the quality and consistency of

15 the fruit entering channels of trade will meet

16 consumer demand, compete with product from

17 other global production areas, and assure a

18 fair economic return. The marketing order

19 revisions will enable the regulation of new

20 varieties, giving us the confidence to plant

21 and invest.

22 Hunt Bros. is also heavily

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1 invested in the process sector of the Florida

2 citrus industry. We were one of the founding

3 members of what is today known as Florida's

4 Natural. It is our expectation that the

5 process side of our business will remain an

6 important market. However, we also see a

7 bright future for the fresh sector. Florida

8 is the closest local supplier to the eastern

9 seaboard of the United States, the largest

10 citrus consuming populous in the world.

11 This is a coveted market by many,

12 and one that Florida is well positioned to

13 recapture. New consumer-friend varieties will

14 be a key to our competitive position in this

15 market. Thank you.

16 JUDGE CLIFTON: Thank you, Mr.

17 Hunt. Before I invite other questions, I

18 notice that the first page has a date April

19 19, 2013, and the second page has a date April

20 22, 2013, but it was clearly all one

21 statement. Do you have any comment about

22 those dates?

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1 THE WITNESS: I think the second

2 one was computer generated. So, I didn't

3 notice it when it was printed.

4 JUDGE CLIFTON: All right. Now, I

5 would invite questions, first by USDA

6 employees.

7 THE WITNESS: Okay, it perhaps

8 might be, in regards to this, if they would

9 allow Dr. Gmitter to go ahead with his. And

10 then we can answer questions together. It

11 might save us a little bit of time.

12 JUDGE CLIFTON: That's fine with

13 me.

14 THE WITNESS: If that's okay.

15 JUDGE CLIFTON: That's fine with

16 everyone. We'll do that. Dr. Gmitter, would

17 you, first, you're sworn, so if you'll just

18 state and spell your name for us.

19 Whereupon,

20 DR. FRED GMITTER, JR.,

21 recalled as a witness herein, having been

22 previously duly sworn, testified as follows:

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1 THE WITNESS: My name is Fred

2 Gmitter, F-r-e-d. The last name spelled G-m-

3 i-t-t-e-r.

4 JUDGE CLIFTON: All right, and I

5 see Jr.

6 THE WITNESS: Jr.

7 JUDGE CLIFTON: All right, and

8 what is your doctorate in?

9 THE WITNESS: I have a PhD in

10 plant breeding and genetics through the

11 Department of Horticultural Sciences at the

12 University of Florida.

13 JUDGE CLIFTON: Excellent. Well,

14 we're very happy to have you here.

15 THE WITNESS: Thank you.

16 JUDGE CLIFTON: All right, your

17 testimony is being distributed now, and I have

18 five pages here, and I'm marking that as

19 Exhibit 25. And you may proceed.

20 (Whereupon Exhibit No.

21 25 was marked for

22 identification.)

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1 TESTIMONY BY FRED GMITTER

2 THE WITNESS: Thank you. I am a

3 professor with a 95 percent research

4 appointment in citrus breeding and genetics,

5 based at the University of Florida's Citrus

6 Research and Education Center in Lake Alfred,

7 since 1985. I received my BA and MS degrees

8 from Rutgers, the state university of New

9 Jersey, with a specialization in plant

10 breeding.

11 I, subsequently, was graduated

12 from the University of Florida in 1985, and

13 was awarded the PhD degree with a

14 specialization in citrus genetics and

15 breeding. I have nearly 30 years of

16 professional experience in the area of citrus

17 genetics.

18 Currently, I am a University of

19 Florida research foundation professor of

20 citrus genetics and breeding at the University

21 of Florida's Citrus Research and Education

22 Center, and a member of the faculty of the

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1 Department of Horticultural Sciences where I

2 have remained since 1985.

3 My research is focused on the

4 development of genetically improved citrus

5 scion and rootstock varieties through the

6 application of traditional breeding

7 approaches, and the incorporation of various

8 tools and techniques of molecular biology and

9 genomics. In addition, my research program is

10 deeply involved in structural and functional

11 genomics of citrus.

12 I have produced more than 130

13 research articles on citrus genetics and

14 breeding that include refereed journal

15 publications, book chapters, bulletins,

16 invited manuscripts and trade journal

17 articles. I have gained recognition

18 nationally and internationally for my

19 accomplishments and achievements in this

20 research area, as evidence by more than 85

21 invitations to speak on these topics at

22 national and international conferences,

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1 meetings and symposiums.

2 I served as the chair of the Crop

3 Germplasm Committee of the National Clonal

4 Germplasm Repository for citrus and dates. I

5 have served as the leader of the International

6 Citrus Genomics Consortium, ICGC, from 2006

7 until now. During the past two years, I have

8 been a principal investigator, PI, or co-PI on

9 competitive research grant projects that have

10 totaled more than $4 million.

11 I serve on the editorial board of

12 several national and international journals.

13 I am also an ad hoc reviewer of several

14 national research program agencies in plant

15 genetics, genomics and breeding, including the

16 USDA National Research Initiative and National

17 Science Foundation.

18 Most relevant to today's topic, I

19 have been responsible, along with my

20 colleagues at UF, for the development and

21 release of more than 10 new citrus varieties

22 that are aimed at improving the

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1 competitiveness of the Florida citrus

2 industry, processing and fresh market segments

3 both, in the domestic and global markets.

4 By providing improvements in

5 existing categories, e.g., sweet oranges with

6 earlier or later maturity, improved color and

7 flavor attributes, et cetera, as well as

8 generating new and unique hybrids that may

9 revitalize the struggling fresh fruit

10 business.

11 The scientific world is in the

12 midst of a pervasive revolution based on

13 genome sequencing technology, which is leading

14 to dramatic new insights on fundamental

15 understanding of biological organisms and

16 their relationships one to another. Citrus

17 science is sure to be affected by these

18 tremendous advances in technology, and

19 subsequent new understandings.

20 However, these advances are

21 proceeding more rapidly than are the

22 conventions of taxonomy upon which the

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1 definitions of citrus species and their

2 derived varieties are based. At the present

3 time, I see no need to be concerned with

4 changes in names or identifies of citrus

5 species as they currently exist.

6 There are two changes I would

7 recommend to the existing, and I'll add here,

8 proposed definitions as found in 905.4, fruit,

9 simply to be in line with currently accepted

10 norms. Specifically, the currently accepted

11 binomial for pummelo is citrus maxima merr,

12 m-e-r-r, not citrus grandis, as listed

13 previously. Further, there is an incorrect

14 spelling of poncirus trifoliata, ending with

15 an "a", not p. trifoliate, ending with an "e"

16 as currently written. Minor corrections from

17 a professor.

18 As indicated, I am a citrus

19 breeder who, together with colleagues, has

20 released many new varieties already, some of

21 which have already been produced and marketed

22 commercially, such as our sugar belle mandarin

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1 hybrid and the valquarius sweet orange, which

2 is just now coming into production for the

3 juice industry. We are actively developing

4 several more that we hope may have benefit to

5 the Florida citrus industry in the coming

6 years.

7 Some of these will, very

8 obviously, fit into existing categories such

9 as sweet orange. But others, clearly, are of

10 hybrid origin, and will present relatively

11 unique attributes that may distinguish them

12 from currently known market varieties.

13 Varieties are being released by the UF Citrus

14 Breeding Program in a fast track testing

15 option under pre-negotiated conditions, where

16 limited numbers of trees will be grown by

17 interested growers, but no fruit will be

18 allowed for sale.

19 Once these selections have been

20 assessed for their potential value, and

21 growers or others make decisions to plant

22 sufficient numbers of trees to produce a

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1 supply of fruit for marketing through ordinary

2 commercial channels, commercialization will

3 proceed. In my opinion, this seems a logical

4 point at which questions regarding regulation

5 of quality standards could be considered and

6 addressed.

7 There will, undoubtedly, be

8 situations where the fruit of varieties will

9 not meet quality or size standards,

10 particularly the latter. The fresh citrus

11 market has seen dramatic growth in consumer

12 preference for small sized mandarin fruit that

13 are easy to peel, seedless and convenient.

14 The breeding programs in Florida have made

15 advanced selections which, currently, are

16 under evaluation to meet this relatively new

17 consumer demand, and I believe these would not

18 meet currently defined standards on size.

19 Another example where existing

20 quality standards may not readily be met is a

21 new variety that has very recently been made

22 available, currently known as UF914. This is

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1 a hybrid of pummelo with grapefruit that

2 produces fruit larger than the otherwise

3 resembling ordinary grapefruit. It,

4 generally, has higher sugar levels and lower

5 acidity, yet retains the red pigmentation,

6 flavor and aroma of ordinary grapefruit.

7 A critical important attribute of

8 this particular variety is its extremely low

9 content of furanocoumarins, those chemicals

10 contained in ordinary grapefruit that are

11 responsible for the so-called grapefruit juice

12 effect, and subsequent medical recommendations

13 regarding limited grapefruit consumption. As

14 a consequence of its unique chemical

15 composition, there could be a very substantial

16 demand for fruit of this variety by consumers.

17 It is now UF policy that new

18 citrus varieties, indeed, whenever practical,

19 all new plant varieties developed, are

20 patented or protected under appropriate

21 conventions to protect intellectual property.

22 New varieties can be made available as

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1 exclusive or general releases. Under the

2 former, negotiations take place according to

3 publicly known UF policies, and license are

4 granted to public or private entities that

5 become responsible for commercialization

6 policies, including decisions in industry-wide

7 production levels, distribution and

8 availability of propagation materials, et

9 cetra. Trademark protection can be sought, as

10 well.

11 General releases are those absent

12 any exclusivity, though royalty fees will

13 still, most likely, be established. Further

14 details on the UF policy and associated

15 processes can be obtained from the UF IFIS

16 deemed for research, as well as from the

17 Florida Foundation Seed Producers, a non-

18 profit direct support organization of UF with

19 responsibility for managing plant germplasm

20 and new varieties coming from the breeding

21 program.

22 In my opinion, it is essential

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1 that the industry be enabled to utilize the

2 provisions of Marketing Order 905 in the

3 rapidly changing citrus variety landscape,

4 with many more new varieties becoming

5 available than ever before, to support the

6 position of Florida fresh industry and the

7 evolving and fluid marketplace that is

8 currently at hand.

9 New varieties, by their very

10 nature, will present unique marketing

11 opportunities. But also will, implicitly,

12 present different and unique quality

13 attributes that will likely require visitation

14 of the measures and standards of quality

15 relative to those applied to the current

16 portfolio of varieties. The success of these

17 new varieties, as well as the future of

18 Florida's fresh citrus industry, will be

19 better secured by ensuring that new varieties

20 will be required to meet quality standards.

21 Thank you.

22 JUDGE CLIFTON: Thank you, Dr.

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1 Gmitter. I'm going to ask USDA employees to

2 ask any questions you have of either Dr.

3 Gmitter or Mr. Hunt, and you may refer to any

4 of the exhibits that we have, including 24 and

5 25. Ms. Schmaedick, would you begin?

6 EXAMINATION

7 BY MS. SCHMAEDICK:

8 Q Thank you, Dr. Gmitter, for your

9 testimony. I'd like to start with just a few

10 clarification of terms of that you used in

11 your testimony. On Page 1, I am not familiar

12 with citrus scion. Could you tell me what

13 that means, or what that is?

14 A Certainly. Citrus trees are

15 composite organisms. There is a rootstock and

16 a scion. A scion is the fruiting variety. It

17 may be an orange, a mandarin, a pummelo, and

18 it is grafted or budded onto a rootstock,

19 which is a genetically distinct plant. Most

20 fruit crops, many fruit crops are grown in

21 this way; apples, peaches, grapes. There is

22 a rootstock and there is a scion, which is the

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1 fruiting variety.

2 Q Thank you for that clarification.

3 I aware of that technique, I just didn't know

4 the term, so thank you. And I believe the

5 term functional genomics. I think you touched

6 on that later in your testimony. But could

7 you just tell us what that is in layman's

8 terms, please?

9 A The simple answer is no. But I

10 will give it a shot. In the past 15 years,

11 there's been an explosion in biological

12 sciences, in genome sequencing. The genome is

13 the collection of DNA of any given organism,

14 and breaking it down into the individual four

15 letters of the genetic code. And so, we

16 produce these things for a number of

17 organisms, including many citrus varieties.

18 So now we have a catalog, a

19 library of all the genes that exist within an

20 orange, within a mandarin, whatever citrus

21 you're looking at. The question then becomes

22 what do these genes actually do. We can

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1 define them based on computer algorithms and

2 complex software. We can identify genes based

3 on the characteristics of the sequences. But

4 there are about 25,000 to 30,000 genes in the

5 genome.

6 And so the question, then, really

7 becomes which genes are responsible for what

8 attributes, what characteristics, what

9 phenomena, what metabolism, what whatever you

10 want to look at. So that's as close as I can

11 get in layman's terms to what functional

12 genomics is.

13 Q And there are only 30,000?

14 A Yes. Actually fewer. It looks

15 more like 26,000, but it depends on who's

16 counting.

17 Q I apologize. I'd like to get back

18 to the question of pummelo that I asked

19 earlier. Are you familiar with how the

20 production of pummelos has increased over the

21 past few years? Can you tell me its, sort of,

22 relevance in context to the other types of

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1 citrus fruits that are being grown, and how

2 it's grown over time?

3 A When I began working here 25 years

4 ago, there was a very limited production of

5 pummelo. Over the years, I cannot tell you

6 the acreage or the rate of increase, but over

7 the years it has become, as I mentioned

8 earlier, an item of general commerce. When I

9 began here, most of the pummelos that were

10 grown in Florida were marketed up the east

11 coast, primarily to Asian food stores, Asian

12 people being most familiar with the pummelo,

13 and it actually being the citrus fruit of

14 choice for most Asians.

15 Now, in fact, you do see pummelos

16 in Walmart and in the supermarket chain

17 stores, and they're coming from Florida, as

18 well as from California. So it's increased.

19 It hasn't increased nearly as much as the

20 production of mandarins have in the last 10

21 years, exploding in California, for example.

22 But it has become an item of commerce.

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1 Our breeding program has developed

2 several new pummelo varieties with improved

3 attributes, and there is a growing interest

4 among some in the fresh citrus community to

5 produce these. It's still viewed more as a

6 niche market in many ways, but it's growing.

7 Q So, in your professional opinion,

8 the pummelo has arrived at the point where it

9 should be officially incorporated into the

10 marketing order's definition of fruit?

11 A In my opinion, yes.

12 JUDGE CLIFTON: Mr. Hamner,

13 identify yourself, please.

14 MR. HAMNER: George Hamner. The

15 way we understand commercially viable, though,

16 the committee would have to vote on that. And

17 in all candor, I would say probably not. That

18 the volume of pummelos, although increasing,

19 is probably not to what would be the level we

20 would consider commercially viable. Remember,

21 we're dealing with a document. We're looking

22 well into the future as to when it would be

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1 commercial, and that's why it's there, in my

2 opinion.

3 MS. SCHMAEDICK: Thank you, Mr.

4 Hamner. Is it not also true that, in order to

5 be able to regulate a pummelo variety, it must

6 first be officially included in the definition

7 of fruit of which varieties --

8 MR. HAMNER: Yes, I think that's

9 the importance of what Dr. Gmitter is saying.

10 Is that he recognizes, as has made us

11 recognize, it is a variety or category unto

12 itself, where we used to think of it as a

13 grapefruit.

14 MS. SCHMAEDICK: Thank you. And

15 let's see, Mr. Hunt, I had a question for you.

16 Are you aware of any growers in the production

17 area that only produce pummelos?

18 MR. HUNT: That are only producing

19 pummelos? No I am not.

20 MS. SCHMAEDICK: Dr. Gmitter?

21 DR. GMITTER: No I am not.

22 MR. HAMNER: There's one named Dr.

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1 Benimerito in the Indian River District.

2 MS. SCHMAEDICK: He only produces

3 --

4 MR. HAMNER: Yes. He only

5 produces pummelos on a 40-acre grove. Sells

6 them in Miami and to the Asian groups and

7 potential around the country. He's the only

8 one I know of.

9 JUDGE CLIFTON: Would you spell

10 his name for us?

11 MR. HAMNER: Oh, man. It's spells

12 like it's sounds. He's Filipino. It's Dr. B-

13 e-n-i-m-e-r-i-t-o,

14 Benimerito.

15 JUDGE CLIFTON: Do it again.

16 MR. HAMNER: Dr., D-r. B-e-n-i-m-

17 e-r-i-t-o.

18 JUDGE CLIFTON: So all of that,

19 that Benimerito is all just his last name.

20 MR. HAMNER: It's one word.

21 That's his last name, and I, we call him Beni,

22 so I have no idea what his real first name is.

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1 JUDGE CLIFTON: Okay, then, thank

2 you.

3 MS. SCHMAEDICK: And this

4 individual doesn't produce any of the other

5 citrus fruit?

6 MR. HAMNER: No he does not.

7 MS. SCHMAEDICK: To your

8 knowledge, is this individual aware of the

9 proposal to potentially regulate pummelos?

10 MR. HAMNER: Very much so, and he

11 is very in favor of doing this. He's wondered

12 why we're taking so long.

13 MS. SCHMAEDICK: Thank you. I'll

14 just ask the question, and whoever has an

15 answer can answer. How about that? Okay.

16 Are there any other, or any hybrid fruit or

17 varieties that are fairly new to the market

18 that are currently competing and not

19 regulated?

20 MR. CHADWELL: Arthur Chadwell.

21 Sugar belle is one that has, is it the sugar

22 belle?

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1 DR. GMITTER: That's right.

2 MR. CHADWELL: Is in it's, I would

3 still say in it's experimental stage, and has

4 not been classified nor regulated yet.

5 MS. SCHMAEDICK: And is the --

6 MR. CHADWELL: Very limited

7 quantities have been produced.

8 MS. SCHMAEDICK: Is the sugar

9 belle a product of one of the current covered

10 categories? Is it an orange, grapefruit,

11 tangerine or tangelo?

12 DR. GMITTER: We released it and

13 called it a mandarin hybrid. So it's a

14 tangerine.

15 MS. SCHMAEDICK: Thank you.

16 DR. GMITTER: Tangerine and

17 mandarin are --

18 MS. SCHMAEDICK: Right, right.

19 DR. GMITTER: -- very confusing

20 terms, and have different meanings to

21 different people but, basically, are the same

22 thing.

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1 MS. SCHMAEDICK: So, in your

2 professional opinion, because it is part of

3 the tangerine family, the committee would have

4 the authority to recommend that that variety

5 become a regulated variety. Is that correct?

6 DR. GMITTER: They could have

7 that, yes.

8 MR. HAMNER: George Hamner. Yes

9 ma'am, that's what I would think, yes.

10 MS. SCHMAEDICK: Thank you.

11 JUDGE CLIFTON: This is very

12 small. How do you spell sugar belle?

13 DR. GMITTER: S-u-g-a-r second

14 word belle. Here's your chance for French, B-

15 e-l-l-e.

16 JUDGE CLIFTON: Thank you.

17 DR. GMITTER: You're welcome.

18 MS. SCHMAEDICK: And I believe

19 this question would be more directed toward

20 either Mr. Chadwell or Mr. Hamner. In your

21 opinion, could assessment collected under the

22 marketing order potentially be used to develop

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1 hybrids, specifically, through research and

2 development programs?

3 MR. HAMNER: Yes ma'am, I do

4 believe that would be considered, could be

5 considered.

6 MS. SCHMAEDICK: Are there any

7 programs currently?

8 MR. HAMNER: No ma'am, because we

9 are, the Department of Citrus is funding the

10 development for the industry right now. But

11 if that failed, I guess the CAC could pick up

12 the ball if we needed to.

13 MS. SCHMAEDICK: Do you believe

14 that that would be supported by producers and

15 handlers regulated --

16 MR. HAMNER: Yes ma'am. The

17 original New Varieties Development Management

18 Corporation was started through Florida Citrus

19 Packers and funded by fresh fruit growers,

20 transferred to the, the funding has gone to

21 the DOC, and it's still funded through fresh

22 fruit funds. And, as a fresh fruit items, yes

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1 ma'am, it would be very supported. You heard

2 Frank Hunt's testimony about the future. And

3 he's just, as a grower to himself, it's very

4 much across the board.

5 MS. SCHMAEDICK: Thank you. I'm

6 not sure if this particular issue is relevant

7 in the citrus industry, but Dr. Gmitter you

8 earlier said that the hybrid process, I guess,

9 involves genetic mapping and, I guess,

10 manipulation, perhaps, of the genetics to

11 create hybrids. Is that correct?

12 DR. GMITTER: Genetic mapping is a

13 tool.

14 MS. SCHMAEDICK: Oh, I'm sorry.

15 DR. GMITTER: That's okay.

16 MS. SCHMAEDICK: I'm not very

17 technical in this area.

18 DR. GMITTER: That's all right.

19 Of the varieties that we've produced up until

20 this point in time that have been made

21 available for release, these have all been

22 developed using traditional plant breeding

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1 approaches, including crossing a male and a

2 female parent, as well as the selection of

3 naturally occurring mutations. Which has been

4 the history of citrus genetic improvement for

5 several millennia.

6 MS. SCHMAEDICK: So, I guess my

7 question is, and I think you touched on this

8 in your testimony. In the process of

9 developing these hybrids, you mentioned that

10 there are patents that go along with that.

11 DR. GMITTER: Yes.

12 MS. SCHMAEDICK: So then, how does

13 that work within the industry in terms of how

14 would one get a license to produce a new

15 fruit? And is that costly? Would it be a

16 burden on small entities, for example, small

17 producers that want to produce a new fruit?

18 DR. GMITTER: Do you want to give

19 it a shot?

20 MR. HAMNER: Sure. We have,

21 George Hamner. We have, within the industry,

22 through New Varieties Development Management

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1 Corporation, that's part of its purpose. Is

2 to set up licensing and handling the

3 coordination of development of the plant

4 material from the seed through people like Dr.

5 Gmitter, and into the hands of small growers.

6 You heard earlier today about fast

7 track, where we have tier one, tier two, tier

8 three. That is the process. It's in place,

9 and we have agreed funding on, already, on

10 paper for the licensing. Where we actually

11 make royalty payments to the people involved,

12 and move through the system accordingly. And

13 every grower has a shot at doing this.

14 So, the system does exist, and it

15 is to the benefit of small growers because of

16 the way it's set up. More so even than big

17 growers, frankly.

18 DR. GMITTER: If I might

19 elaborate. The University of Florida position

20 begins with an invitation to negotiate which

21 goes out to all. And the process is open and

22 transparent for who may be licensed,

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1 ultimately, for any given cultivar. And, up

2 until this point in time, the process has

3 resulted in licenses being granted, not

4 directly from the University of Florida, but

5 from Florida Foundation Seed Producers, this

6 direct support organization that was listed

7 earlier.

8 Licenses have been granted for the

9 two varieties, thus far, that have been

10 licensed to the New Varieties Development

11 Management Corporation.

12 MS. SCHMAEDICK: So these new

13 varieties are as accessible to small producers

14 as they would be to large producers?

15 DR. GMITTER: Absolutely.

16 MR. HAMNER: Yes, provided you

17 sign up in the beginning, when they're first

18 offered. There is a process you have to

19 follow, not matter what your size.

20 MS. SCHMAEDICK: And if you miss

21 that window, what happens? Does it become

22 more expensive?

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1 MR. HAMNER: You just, you don't

2 do, you can pick up in tier three later on.

3 Further down the road, you can pick up, you

4 can pick up the material that is available to

5 everyone after a period of time anyway. You

6 just miss out on the early experimentation,

7 and maybe the early start of a process.

8 DR. GMITTER: The process was

9 designed to incentivize growers who are

10 interested to come forward.

11 MR. HAMNER: Right.

12 DR. GMITTER: There's a nominal

13 fee to enter tier one, $50, and you're

14 entitled to up to 30 trees. And that tier one

15 status gives you tier two statues, a lower

16 royalty rate, should you decide to go

17 commercial. If you miss the window, you still

18 have a chance to get in as tier three at a

19 higher fee. And it's also important to say

20 that these royalty rates were negotiated

21 painstakingly between the University of

22 Florida, Florida Foundation Seed Producers,

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1 and the industry at large.

2 MS. SCHMAEDICK: And Mr. Hunt, in

3 your opinion, at that tier three level does

4 the royalty expense, would that prohibit a

5 small producer from deciding to grow that new

6 hybrid?

7 MR. HUNT: No, I don't think so.

8 You have to understand that this has been an

9 evolving process that is intellectual

10 property, or the breeding of new varieties has

11 become something that, globally, is being

12 licensed and patented and controlled by

13 private entities, by public entities, by, you

14 know, it's a very evolving thing.

15 And, once upon a time, it was a

16 25-30 year process to get a new variety. And

17 times have changed. The industry's changed.

18 It was imperative that we were able to get

19 these varieties out, get them evaluated. And,

20 truthfully, until you got them in the hands of

21 a commercial grower, the breeders couldn't

22 give you a variety with a guarantee to it.

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1 They didn't know.

2 And they could research it on

3 small plantings in various conditions. But

4 once it got out into the industry, it may or

5 may not perform. So, what we've developed

6 here is, with the realization that they were

7 going to be released with patents. There were

8 going to be royalties attached to them. Then

9 we formed the NVDMC to represent the industry.

10 And this was done, really, at initiative of

11 the Florida Citrus Packers.

12 The NVDMC, then, has negotiated

13 and worked with Florida Foundation of Seed.

14 Florida Foundation of Seed, though you can't

15 legally be given a preference, they have given

16 preference to us, and we have gotten varieties

17 and worked with them, and it's made these

18 varieties available.

19 The three-tier process was

20 designed to say okay, we have a variety that

21 looks like it's got potential. It's got

22 characteristics that we're really interested

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1 in. Fred's got three trees. Maybe it works,

2 maybe it doesn't work. And so, we want to get

3 those varieties out into a commercial setting.

4 So that what we're trying to do is

5 incentivize growers in that tier one to take

6 these trees, grow them out, see what various

7 cultural practices, various environmental

8 settings, soils and so forth would produce.

9 And if it looks good, we'll go commercial with

10 it, tier two. But you're giving those growers

11 that were in tier one a little bit of a head

12 start into tier two.

13 The grower that's in tier three,

14 and in some cases it may be the small grower

15 that says you know, I really can't afford to

16 experiment here. I'm going to just ride this

17 one out. They have the opportunity to be in

18 tier one, but they can ride it out, wait and

19 see okay, yeah, this is going to be a winner.

20 I'm in tier two.

21 The royalty at that level is

22 somewhat higher, but it's not prohibitive to

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1 that grower being able to enter at that level.

2 And then he's getting something that's proven.

3 MS. SCHMAEDICK: Right, so it's

4 kind of a trade off on the cost benefit

5 analysis.

6 MR. HAMNER: Right.

7 MS. SCHMAEDICK: Do you take the

8 risk at the early stage, and may not have the

9 return. Or do you wait until it's proven.

10 MR. HAMNER: Exactly.

11 MS. SCHMAEDICK: Is that what

12 you're saying?

13 MR. HAMNER: Exactly.

14 MS. SCHMAEDICK: Okay, thank you.

15 And, this question has been asked several

16 times, but could anyone of you tell me what is

17 the general grower level of enthusiasm within

18 the industry for the development of hybrids?

19 Do you think it's widely supported? Anybody?

20 MR. HAMNER: Yes ma'am. It's very

21 highly supported.

22 MR. HUNT: I think so. And, in

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1 fact, in the current environment we're in,

2 there's some angst over why we don't have

3 something faster.

4 MR. HAMNER: Actually, they're

5 taking a little too long.

6 MS. SCHMAEDICK: I see.

7 MR. HAMNER: We dropped from 30

8 years, and we're looking for six months.

9 MS. SCHMAEDICK: I see.

10 DR. GMITTER: Our breeding program

11 has been supported, not only by NVDMC over

12 time, but also through another taxing

13 mechanism within the industry for more than 15

14 years now. So, it's been a long-term

15 investment, a long-term interest on behalf of

16 all segments of the industry.

17 MS. SCHMAEDICK: Thank you. Those

18 are my questions for now, thank you.

19 JUDGE CLIFTON: Before I ask for

20 more questions from USDA, do any of you want

21 to add anything at this point?

22 MR. HAMNER: No.

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1 JUDGE CLIFTON: All right, then

2 other questions from USDA employees first?

3 Mr. McFetridge.

4 MR. MCFETRIDGE: Marc McFetridge,

5 USDA. To be honest, I've never eaten a

6 pummelo. Just a quick question. I know you

7 said that it was very popular with the Asian

8 population. Is pummelo native to Florida, or

9 is that a species that's been brought over

10 from the Pacific Rim or Asia?

11 DR. GMITTER: There are no citrus

12 that are native to Florida. Citrus originated

13 in the old world in Southeast Asia. Primarily

14 in between China and Northeastern Indian, and

15 we used to Indochina Southeast Asia.

16 MR. MCFETRIDGE: Thank you. I

17 didn't know that. Dr. Gmitter, I have a quick

18 question for clarification. Your testimony,

19 on Page 3, the top part of it you're talking

20 about the scientific names for pummelo and for

21 the other one, I'm sorry, I can't even come

22 close to pronouncing it correctly. So, is the

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1 notice of hearing, is that incorrect for the

2 scientific names for pummelos? You have it

3 here for citrus maxima and in the transcript

4 it's C. gradu --

5 DR. GMITTER: C. grandis.

6 MR. MCFETRIDGE: Grandis.

7 DR. GMITTER: You know, citrus

8 taxonomists come and go, and names come and

9 go.

10 MR. MCFETRIDGE: Okay.

11 DR. GMITTER: The currently most

12 widely recognized binomial name, which is the

13 two names, the Latins names for pummelo is

14 citrus maxima, and that has been the case for,

15 perhaps, the last 15 years. In scientific

16 circles, that's the name that's expected to

17 appear in journal articles, refereed journal

18 articles and so on. Citrus grandis was widely

19 used, and still you can find it. But, citrus

20 maxima is the preferred.

21 The second one, poncirus

22 trifoliata, many times spell check will

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1 convert trifoliata to trifoliate. And I don't

2 know if that's the case in this situation or

3 not. But the official name of that species is

4 poncirus trifoliata, with an a at the end.

5 MR. MCFETRIDGE: Okay. So, based

6 on your professional opinion, to basically

7 made the order as accurate as possible, the

8 pummelo probably should be switched over from

9 the citrus grandis to citrus maxima?

10 DR. GMITTER: That is my

11 suggestion, yes.

12 MR. MCFETRIDGE: All right. And

13 just double checking the hearing, the notice

14 of the hearing. It looks like the spell check

15 did transfer it over to an "e" instead of an

16 "a." Thank you. On Page 4, Dr. Gmitter, you

17 talked about the so-called grapefruit effect.

18 Could you just elaborate on that for us?

19 DR. GMITTER: Certainly. There is

20 this family of chemicals called

21 furanocoumarins that are found in grapefruit.

22 These chemicals interact with an enzyme

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1 produced in the liver, in the human liver.

2 This enzyme is involved in the metabolism of

3 pharmaceutical drugs, things such as statins,

4 for example, blood pressure medications, birth

5 control pills, depression medications.

6 These enzymes break down the

7 medicines into smaller molecules. They

8 metabolize. And so, as pharmaceutical

9 companies and the medical community are trying

10 to determine what the dosages should be for

11 people, they're assuming that these enzymes

12 are functioning within a certain normal range

13 of activity. So the drugs are being broken

14 down.

15 Furanocoumarins inhibit the

16 activities of these enzymes. So what happens

17 with certain specific pharmaceuticals, not all

18 meds, is that rather than being metabolized,

19 they remain unmetabolized and are absorbed in

20 the bloodstream at higher concentrations. So

21 the concentration of the medicines in the

22 human bloodstream is higher than what was

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1 calculated and anticipated.

2 Therefore, the medical community,

3 generally, recommends people who are taking

4 certain statins, not all statins, certain

5 blood pressure medications, if you're on these

6 medicines, you should not drink grapefruit

7 juice, you should not eat grapefruit. I think

8 it's important to state that there are few or

9 no documented cases of any harm occurring to

10 people as a consequence of this.

11 It's also important to state that

12 there is variation among human beings, among

13 individuals, in terms of the suppression of

14 enzyme activity or, in fact, even their own

15 native level of these enzymes. Grapefruit

16 juice was the first food in which such

17 potentially significant interactions were

18 discovered. So it became, if you will, the

19 poster child for food medical interactions,

20 and it's received negative notoriety as a

21 consequence of that.

22 MR. MCFETRIDGE: Based on this

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1 grapefruit effect, do you see that this could

2 have some type of, I guess, affect on

3 resulting in the decline in grapefruit juice

4 consumption, too?

5 DR. GMITTER: It clearly has. If

6 we look at our population who enjoy

7 grapefruit, generally, they're older people.

8 Younger people aren't particularly fond of

9 that sour bitter fruit like some of the old

10 timers are. The older people, generally, are

11 more likely to be on blood pressure meds, on

12 statins, and so on. And so, you do have this,

13 there has been, certainly, an impact on the

14 market for grapefruit and grapefruit products.

15 MR. MCFETRIDGE: Thank you. I

16 just have another quick question for Mr. Hunt.

17 In your testimony, you talked about the top

18 two tangerine varieties are not Sunburst or

19 Honey. I was wondering if you'd just

20 elaborate what are the two top varieties now?

21 MR. HUNT: What I was referring to

22 is what was being propagated in the nurseries,

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1 so what are growers now planting going

2 forward. And so, though the Sunburst was very

3 popular in the early '90's and through the

4 '90's and up until recent years, sunburst

5 today are not being propagated in the

6 nurseries and planted. And growers today are

7 looking towards some of the new varieties that

8 have come in more recently such as the Tango

9 and the U.S. Early Pride.

10 MR. MCFETRIDGE: Okay, thank you.

11 That's all the question I have.

12 JUDGE CLIFTON: What other

13 questions do USDA employees have, of any of

14 the people sitting at what I'm calling the

15 board table? Ms. Schmaedick.

16 MS. SCHMAEDICK: I have another

17 question for Dr. Gmitter. Would you mind

18 looking at the definition of fruit in the

19 notice? Oh, you might not have it.

20 DR. GMITTER: I don't have that.

21 MS. SCHMAEDICK: That's okay.

22 I'll just elaborate on my question.

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1 DR. GMITTER: Okay, I'm looking at

2 copy.

3 MS. SCHMAEDICK: So, in the

4 current definition of fruit, we have Temple

5 oranges, tangelos and Honey tangerines listed

6 as, I believe you referred to them as

7 categories. In the proposed changed

8 definition, Temple oranges, tangelos and

9 tangerines are removed. And my question is,

10 I'll break it down into a series.

11 In the removal of Temple oranges,

12 based on your professional opinion, are Temple

13 oranges then classified along with the

14 Paragraph A which would be citrus sinensis,

15 Osbeck, commonly called oranges?

16 DR. GMITTER: Absolutely not.

17 MS. SCHMAEDICK: No. Where do

18 they go, then?

19 DR. GMITTER: They are, based on

20 our best information, they would be classified

21 under what we call the tangors, which are

22 hybrids of citrus reticulata, mandarin or

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1 tangerines, with sweet oranges. That they

2 were ever called Temple oranges is a misnomer.

3 And citrus history is full of misnomers.

4 There are Satsuma oranges, as well, which

5 really are not oranges at all, but are

6 mandarin types. So the use of the word orange

7 there is an historical misnomer commonly used.

8 MS. SCHMAEDICK: So this, in

9 effect, is a correction in that it's not its

10 own category, but this Temple orange, which

11 is, I guess, a common name is, technically, a

12 fruit that would fall in the category of

13 tangerines or mandarin. Is that correct?

14 DR. GMITTER: It would fall in the

15 category of tangors.

16 MS. SCHMAEDICK: Tangors. Do we

17 have a --

18 DR. GMITTER: Which is under --

19 MR. HUNT: Citrus hybrids.

20 DR. GMITTER: -- citrus hybrids.

21 MS. SCHMAEDICK: I see, okay.

22 DR. GMITTER: You see the last

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1 sentence there? In addition, citrus hybrids

2 include tangelo, tangor, citrus reticulata x

3 citrus sinensis.

4 MS. SCHMAEDICK: Thank you.

5 MR. HUNT: And Temple oranges.

6 DR. GMITTER: And Temple oranges.

7 MS. SCHMAEDICK: Okay. Thank you

8 for that clarification. So then, is it also

9 correct that tangelos, are tangelos a hybrid,

10 as well?

11 DR. GMITTER: Tangelos, yes, are

12 hybrid of citrus reticulata by citrus paradisi

13 or citrus maxima. Hybrids of tangerines with

14 grapefruits or with pummelos.

15 MS. SCHMAEDICK: Okay, thank you.

16 And then Honey tangerines, now would they be

17 captured in c) citrus reticulata, Paragraph C

18 DR. GMITTER: Yes and no. They

19 look like tangerines. They peel. We call

20 them Honey tangerines. The varietal name,

21 actually is Murcott. Based on molecular

22 evidence that's been generated in recent

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1 years, we know, also, that the Honey

2 tangerine, like Temple, is a hybrid that

3 originated between some mandarin and some

4 sweet orange. When one makes hybrids, one

5 generates a diverse family of individuals. So

6 that's why they don't look like each other,

7 necessarily.

8 MS. SCHMAEDICK: I understand.

9 DR. GMITTER: Similar, but not the

10 same.

11 MS. SCHMAEDICK: And in the

12 proposed language, again I just want to

13 clarify that the proposal is to include a new

14 category which would be pummelo, and it would

15 remove these hybrids, Temple oranges,

16 tangelos, Honey tangerines, which would be

17 captured under a new Paragraph E. Is that

18 correct?

19 DR. GMITTER: Yes, as I read it.

20 JUDGE CLIFTON: Just so the record

21 is clear, a new paragraph what letter?

22 MS. SCHMAEDICK: D, as in David.

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1 JUDGE CLIFTON: D, as in David.

2 Thank you.

3 MS. SCHMAEDICK: The other

4 question I have for you is regarding, just a

5 moment, I need to find my copy of the notice.

6 In the proposed Paragraph C, which reads

7 citrus hybrids that are hybrids between or

8 among one or more of the four fruits a through

9 d of this section. I just want to make sure

10 that this is, technically, correct, in that

11 Paragraph A refers to oranges, B refers to

12 grapefruit, C refers to tangerines or

13 mandarins, D refers to pummelo, and that all

14 the hybrids that we're discussing today have

15 a parent of one of the four above mentioned

16 categories. Is that correct?

17 DR. GMITTER: All that we've been

18 discussing today, yes, that's correct.

19 MS. SCHMAEDICK: And, in your

20 professional experience, are there other

21 hybrids that are being developed that do not

22 include one of the four categories mentioned?

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1 DR. GMITTER: Well, Paragraph E

2 lists one or more of the four fruits a through

3 d of this section, and the following, and it

4 lists a whole range of other species, lemons,

5 limes, kumquats, and the various hybrids of

6 tangors and tangelos. As a plant breeder, I

7 look at the whole collection as the pallet

8 with which we work.

9 MS. SCHMAEDICK: So, in your

10 professional opinion, the way that Paragraph

11 E is proposed, that would meet the industry's

12 needs in terms of establishing authority to

13 regulate future hybrids as they develop.

14 DR. GMITTER: Yes. It's actually

15 a fairly broad collection of other parents

16 that may or may not, actually, be utilized in

17 the process. So it's broad, and it should

18 encompass --

19 MS. SCHMAEDICK: And is my

20 understanding that of the two parents that are

21 needed to create a hybrid, at least I think

22 it's limited to two, can it be more than two?

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1 DR. GMITTER: We can get very

2 complicated.

3 MS. SCHMAEDICK: Okay.

4 DR. GMITTER: Yes, there can be

5 more than two. In some cases, we have created

6 what we call somatic hybrids.

7 MS. SCHMAEDICK: Oh.

8 DR. GMITTER: Most hybrids we talk

9 about are sexual hybrids, male and female.

10 We're able, through some tissue culture

11 technology, to create somatic hybrids, where

12 we are fusing cells of two different types,

13 and creating a new type, which then, in and of

14 itself, can be used as a male or a female

15 parent to make the crosses.

16 So, in reality, some of the new

17 hybrids that are coming out that are seedless

18 have been developed through this technological

19 approach. So, it is possible to have, there's

20 never more than one mother and one father.

21 But the father and/or the mother can be more

22 complicated than just itself alone.

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1 MS. SCHMAEDICK: So with that

2 information, the way I interpret this proposed

3 definition is that at least one of the parents

4 were, a faction of one of the parents needs to

5 be, in layman's terms, an orange, a

6 grapefruit, tangerine or mandarin or a

7 pummelo. Is that correct?

8 DR. GMITTER: That's right, for

9 the varieties that are grown and produced in

10 Florida. If we begin to talk about lemons,

11 then we start to look at other parental

12 combinations to create lemons and limes. But,

13 with the varieties that are commonly grown

14 here in Florida, and that are regulated, it's

15 one of those four or, potentially, several

16 guys or ladies.

17 MS. SCHMAEDICK: Okay, thank you.

18 I want to turn your attention to the proposed

19 definition of variety. Specifically, there's

20 a new Paragraph F that is being proposed, and

21 I want to, specifically, look at the phrase

22 that comes at the end of that paragraph. It

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1 says that in order to add any hybrid variety

2 to citrus fruit to be regulated under this

3 provision, such variety must exhibit similar

4 characteristics and be subject to cultural

5 practices common to existing regulated

6 varieties.

7 In your professional opinion, will

8 that language work with the future development

9 of hybrids for this industry?

10 DR. GMITTER: I think it should

11 work, given that the word similar is being

12 used there. Were identical there, I would say

13 no, that's restrictive and it's going to not

14 result in outcomes that we're all looking for.

15 But similar, yes, it works, in my opinion.

16 MS. SCHMAEDICK: Thank you, and

17 just for the record, what might be some of the

18 subtle differences that could be seen? For

19 example, earlier today we heard about new

20 varieties that might be entering into the

21 market that have a shorter growing season.

22 Would that be a subtle difference in the

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1 cultural practices, or could you explain?

2 DR. GMITTER: No, I think what was

3 being referred to is a shorter period of time

4 when the fruit might actually be harvested,

5 not necessarily a shorter growing season.

6 With perennial planting, it's always there,

7 and I think that's what was being referred to

8 was the --

9 MR. HAMNER: I think what --

10 Melissa here I think you've worn us out.

11 MS. SCHMAEDICK: I've worn myself

12 out.

13 JUDGE CLIFTON: It's not just the

14 reporter, it's the rest of us. Talk into

15 that, if you will.

16 MR. HAMNER: Okay, the similar has

17 to do with the production practices. When you

18 grow oranges you'd have certain spray programs

19 with grapefruit, certain spray programs. In

20 any given grove there's never identical

21 programs, they're always similar, there are

22 different chemicals people use. And I think

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1 that that's what the implication here is, is

2 that you will be in a program similar to what

3 you were doing if you were growing that

4 category or that variety, et cetera, that's

5 all. It's pretty comprehensive and it's

6 pretty, there's never an identical. You could

7 use one chemical or another chemical, but in

8 the end it's a similar program, that's what I

9 think this intended here.

10 EXAMINATION

11 BY MS. SCHMAEDICK:

12 Q Thank you.

13 A Coward.

14 Q So, to sum it up in layman's

15 terms, if it's grown like an orange?

16 A It's going to be grown like an

17 orange it's going to be called an orange, or

18 some, a hybrid or an orange, yes.

19 Q And it still should be covered by

20 the program?

21 A Yes, we think it's covered.

22 Q Okay.

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1 MR. GMITTER: I'm sorry, I gave a

2 specific example with this UF-914, which is a

3 hybrid of Pummelo with grapefruit. It's very

4 grapefruit like, it's similar to grapefruit,

5 yet it's, if you saw it.

6 MR. HAMNER: We grow it, we use

7 similar programs for growing it.

8 MR. GMITTER: Yeah, the production

9 would be the same. It's similar but not

10 identical to grapefruit.

11 MS. SCHMAEDICK: Excellent, thank

12 you. And one last question for Mr. Chadwell.

13 In the definition of variety there are fairly

14 significant rearranging almost of the way

15 varieties of oranges, grapefruit, tangerines

16 and mandarins are presented. Can you give me

17 the reason behind why this rearranging

18 occurred? Maybe Mr. Hamner?

19 MR. HAMNER: Dr. Gmitter can

20 correct me if in layman's terms this is too

21 simplistic. But the reality starts with

22 hybrids working backwards, rather than from

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1 the fruit varieties or the past working

2 forward. We try to simplify the list and then

3 capture it in the part where we have hybrids

4 because that's what the hybrids are based on,

5 and that, with the rearranging was necessary

6 to make the hybrid paragraph work. If that

7 makes sense.

8 JUDGE CLIFTON: And just for the

9 record, the person who just gave us that

10 testimony was Hamner, not Chadwell.

11 MR. HAMNER: Right, I'm George

12 Hamner.

13 BY MS. SCHMAEDICK:

14 Q So, a follow up question, for

15 example, under paragraph eight, oranges,

16 number two, you have Valencia, Lue Gim Gong

17 and similar late maturing oranges or the

18 Valencia type, so that's a fairly

19 comprehensive description.

20 A Which paragraph, where are we?

21 Q I'm sorry, section 905.5.

22 A I've got it, I'm with you, okay.

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1 Q So, is that a fairly comprehensive

2 description of a number of varieties that fall

3 --

4 A Yes.

5 Q -- into that definition?

6 A Yes, yes, for that very reason,

7 yes.

8 Q Is there a listing of the specific

9 varieties somewhere?

10 A I think it's yet to be determined.

11 Q Okay.

12 A That's why we had to write this

13 the way we did, underneath it.

14 Q Thank you. I have no further

15 questions, thank you.

16 JUDGE CLIFTON: Are there other

17 questions from USDA employees? Are there

18 questions from anyone? I see none. I'm going

19 to turn to Exhibit 24, which has the Hunt

20 Brothers letterhead. Is there any objection

21 to Exhibit 24 being admitted into evidence?

22 There is none, Exhibit 24 is admitted into

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1 evidence. I have Dr. Gmitter's testimony,

2 that's Exhibit 25. Is there any objection to

3 Exhibit 25 being admitted into evidence?

4 There is none. Exhibit 25 is admitted into

5 evidence. Who is next?

6 (Whereupon, Exhibits 24

7 and 25 were received

8 into evidence.)

9 MR. HAMNER: Your Honor, we have

10 two other presenters, it's 5:00 o'clock, we

11 can get these done in an hour. It's kind of

12 a, in my mind it's a regurgitation of some of

13 the stuff we've already done and I don't know

14 how it, the staff feels about it. They both

15 live here, but we would like to try and get

16 done tonight because I think it's much simpler

17 if we can keep this, if they can read quickly

18 and we'll see how they go.

19 JUDGE CLIFTON: I don't --

20 MR. HAMNER: I know you don't like

21 the word quickly.

22 JUDGE CLIFTON: The only person

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1 here who could read quickly and make it work

2 is Hunt.

3 MR. HAMNER: He did good.

4 JUDGE CLIFTON: He did good.

5 MR. HAMNER: All right, Frank,

6 would you read these other two? Quentin Roe

7 is up and then Larry Black.

8 JUDGE CLIFTON: All right, I'd

9 like to take, I'm sorry, but I'm going to eat

10 into your one hour. Let's take a ten minute

11 stretch break, and during that I want us to

12 advise the personnel who has to stay here with

13 us until six that we need them to stay here

14 with until six. And I want the sound man to

15 advise that we will not need the equipment

16 tomorrow, which means we have to finish

17 tonight.

18 MR. HAMNER: Yes, that's right.

19 JUDGE CLIFTON: Okay, thanks.

20 MR. HAMNER: If that's okay, if

21 not we need to make other arrangements.

22 JUDGE CLIFTON: Please be ready to

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1 go at 5:13.

2 (Off the record.)

3 JUDGE CLIFTON: All right, we're

4 back on the record at 5:12. I'm going to

5 swear you in in the seated position. Would

6 you raise your right hand, please.

7 Whereupon,

8 QUENTIN ROE,

9 called as a witness herein, after having been

10 first duly sworn, was examined and testified

11 as follows:

12 JUDGE CLIFTON: Thank you. Please

13 state and spell your name.

14 THE WITNESS: Quentin Roe, Q-u-e-

15 n-t-i-n, R-o-e.

16 JUDGE CLIFTON: And I've marked

17 the document that's entitled Quentin Rose,

18 testimony proposal number two and number

19 seven, as Exhibit 26. You may proceed.

20 (Whereupon, Exhibit No.

21 26 was marked for

22 identification.)

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1 TESTIMONY BY QUENTIN ROE

2 THE WITNESS: My name is Quentin

3 Roe, I reside at 829 State Road 540 West in

4 Winterhaven, Florida. I am President of

5 William G. Roe and Sons, Inc., a family owned

6 shipper of Florida citrus, currently in our

7 85th year in operation. William G. Roe and

8 Sons, Inc. is a large shipper by the SBA

9 definition.

10 I personally own 25 acres of grove

11 in Polk County, Florida. I am on the

12 executive committee of both Florida Citrus

13 Packers, Florida Fruit and Vegetable

14 Association, and the board of directors of the

15 New Varieties Development and Management

16 Corporation. I served on the Florida Citrus

17 Commission for one term, and currently serve

18 as a shipper member of the Citrus

19 Administrative Committee, known as the

20 committee.

21 We have combined the second

22 proposal and the seventh proposal together, as

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1 they both address intrastate regulation of

2 fresh Florida citrus shipments.

3 JUDGE CLIFTON: Now, just to make

4 sure that gets typed right, please spell

5 intrastate.

6 THE WITNESS: I-n-t-r-a-s-t-a-t-e.

7 JUDGE CLIFTON: Thank you.

8 THE WITNESS: The production area

9 of Florida is defined as Section 905.7,

10 production area. Production area means that

11 portion of the State of Florida, which is

12 bounded by the Suwanee River, the Georgia

13 border, the Atlantic Ocean, and the Gulf of

14 Mexico. Production area boundaries are also

15 the boundaries used in the Florida citrus

16 industry to define the intrastate regulation

17 area.

18 Proposal number two revises

19 Section 905.9, handle or ship, to read as

20 follows, means handle or ships mean to sell,

21 transport, deliver, pack, prepare for market,

22 grade, or in any other way to place fruit in

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1 the current of commerce within the production

2 are, or between any point in the production

3 area and any point outside thereof. This

4 proposal would authorize the regulation of

5 intrastate shipments, even though it is not

6 being proposed to do so at this time.

7 Currently, grade and size for

8 intrastate shipments are regulated by the

9 Florida Citrus Commission under the Florida

10 Department of Citrus rules, chapter 20. The

11 order currently regulated interstate and

12 export fresh citrus. The inclusion of

13 intrastate regulation of fresh shipments would

14 authorize all fresh Florida citrus regulation

15 to be under the order. This proposal has

16 industry support and does not conflict with

17 the existing state regulations. In the last

18 16 months the committee has reviewed and

19 considered this proposal. It has been

20 discussed by industry organizations and two

21 members of the Florida Department of Citrus

22 601 Committee, where on the committee's rule

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1 sub-committee, and at no time has the

2 inclusion of intrastate regulation been an

3 issue within our industry.

4 Proposal number seven revises

5 Section 905.52, issuance of regulations, to

6 read as follows, A, whenever the secretary

7 shall find from the recommendations and

8 reports of the committee, or from other

9 available information, that to limit the

10 shipment of any variety would tend to

11 effectuate the declared policy of the act, he

12 shall so limit the shipment of such variety

13 during a specified period or periods. Such

14 regulations may, one, limit the shipments of

15 any grade or size or both of any variety, in

16 any manner, as may be prescribed, and any such

17 limitation may provide the shipments of any

18 variety grown in regulation area two, shall be

19 limited to grades and sizes different from the

20 grade and size limitations applicable to

21 shipments of the same varieties grown in

22 regulation area one. Provided that whenever

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1 any such grade or size limitation restricts

2 the shipment of a portion of a specified grade

3 or size of a variety, the quantity of such

4 grade or size that may be shipped by a handler

5 during a particular week, shall be established

6 as a percentage of the total shipments of such

7 variety by such handler, in such prior period

8 established by the committee, with the

9 approval of the secretary in which he shipped

10 such variety. Clear? Okay.

11 Two, limit the shipment of any

12 variety by establishing and maintaining only

13 in terms of grades or sizes, or both, minimum

14 standards of quality and maturity. Three,

15 limit the shipment of total quantity of any

16 variety by prohibiting the shipment thereof,

17 provided that no such prohibition shall apply

18 to exports or be effective during any fiscal

19 period with respect to any variety other than

20 for one period, not exceeding five days during

21 the week in which Thanksgiving day occurs, and

22 for not more than two periods not exceeding a

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1 total of fourteen days during the period

2 December 20th to January 20th, both dates

3 inclusive.

4 Four, establish, prescribe and fix

5 the size, capacity, weight, dimensions,

6 marking, parentheses, including labels and

7 stamps, end parentheses, or pack of the

8 container or containers which may be used in

9 the packaging, transportation, sale, shipment,

10 or other handling of fruit, provided that such

11 regulation shall not authorize the use of any

12 container or marking which are prohibited

13 under Florida statutes and regulations

14 effective thereunder.

15 Five, provide that any or all

16 requirement effective pursuant paragraphs A,

17 parentheses A, parentheses one, parentheses

18 two, parentheses three and parentheses four,

19 this section applicable to the handling of

20 fruit may be different for the handling of

21 fruit within production area, the handling of

22 fruit for export, or the handling of fruit

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1 between the production area and any point

2 outside thereof within the United States.

3 Provided that such requirements shall not

4 authorize the handling of fruit in any way

5 that is prohibited under Florida statutes and

6 regulations effective thereunder.

7 B, prior to the beginning of any

8 such regulations the secretary shall notify

9 the committee of the regulation issued by him,

10 and the committee shall notify all handlers by

11 mailing a copy thereunder to each handler who

12 has filed his name with said committee for

13 this purpose.

14 MR. HILL: Can we stop for one

15 moment, Your Honor? I noticed that it was

16 section five is the last section that's

17 actually changed the regulation as it

18 currently sits.

19 JUDGE CLIFTON: So, what we just

20 read, B, really doesn't have to have

21 underlining because it's not new?

22 MR. HILL: B, C and D, are all the

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1 same.

2 JUDGE CLIFTON: So that's good, so

3 we still need you to read it, but it's not as

4 important because it's not a change. But go

5 back and read me again this B.

6 THE WITNESS: This will B, non-

7 underlined. Prior to beginning of any such

8 regulations the secretary shall notify the

9 committee of the regulation issued by him.

10 And the committee shall notify all handlers by

11 mailing a copy thereof to each handler who has

12 filed his address with said committee for this

13 purpose. C, not underlined, whenever the

14 secretary finds from the recommendations and

15 the reports of the committee, or from other

16 available information, that a regulation

17 should be modified, suspended or terminated

18 with respect to any of the shipments of fruit

19 in order to effectuate the declared policy of

20 the act, he shall so modify, suspend or

21 terminate such regulation. If the secretary

22 finds that a regulation obstructs or does not

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1 tend to effectuate the declared policy of the

2 act, he shall suspend or terminate such

3 regulation. On the same basis, and in like

4 manner, the secretary may terminate any such

5 modification or suspension.

6 D, not underlined, whenever any

7 variety is regulated pursuant to paragraph,

8 parentheses A, parentheses three, of this

9 section, no such regulation shall be deemed to

10 limit the right of any person to sell,

11 contract to sell or export such variety, but

12 no handler shall otherwise ship any fruit of

13 such variety which was prepared for market

14 during the effective period of such

15 regulation.

16 JUDGE CLIFTON: Okay, now before

17 you continue, does everyone who knows agree

18 that those last three sections are, include no

19 change?

20 MR. HAMNER: I believe it's

21 straight of the current order.

22 JUDGE CLIFTON: All right, thank

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1 you Mr. Hamner. All right, now you may

2 resume.

3 THE WITNESS: This proposal to

4 regulate containers and establish quality

5 standards for the production area intrastate

6 shipments would give intrastate regulatory

7 authority to the committee. The order does

8 not have the authority to regulate export

9 containers in part five of Section 905.52, if

10 the container is not prohibited under Chapter

11 601. Currently, the regulation of pack and

12 containers for intrastate, interstate and

13 export shipments are under the authority of

14 Chapter 20, approved by the Florida Citrus

15 Commission, and inspected for compliance by

16 the Division of Fruit and Vegetables.

17 The pack and containers are

18 standardized and not marked specific, even

19 though different containers are used in

20 different markets. Currently, recommendations

21 for changes to pack and container are

22 developed by the fresh industry and presented

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1 to the Florida Citrus Commission for their

2 approval. It should be noted that moving

3 forward with new varieties and hybrids, the

4 fresh segment of our industry needs to keep

5 the flexibility of current, flexibility to

6 establish minimum grade, size, pack and

7 container regulations for the different

8 markets.

9 The industry mandates inspection,

10 each lot of citrus packed for the fresh

11 market, and this will continue so there would

12 be no impact on this, on inspection.

13 Compliance has not been a problem within the

14 fresh industry, and these proposed changes

15 should not have any adverse impact on

16 compliance, of compliance.

17 The committee has determined that

18 all fresh Florida citrus regulations should be

19 under the authority of the order, as the fresh

20 segment of the Florida citrus industry

21 continues to contract, and has less

22 association with the process segment of the

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1 industry. Also, intrastate fresh markets are

2 regulated under Chapter 20.35, and are

3 currently regulated at different quality

4 standards then interstate or export shipments

5 regulated under the order.

6 Intrastate markets have been

7 recognized by our industry as unique, in part

8 as they are located within the production

9 area, and that much of the fruit is sold

10 locally by fruit stands and gift fruit

11 shippers. Much of this fruit is handpicked by

12 the consumer, and they know it is fresher and

13 they accept a lower external quality. It

14 should be noted that internal quality is

15 maintained at the highest U.S. number one

16 standard. Also, a much greater percentage of

17 this fruit is sold in bins, ten box

18 containers, as mentioned above fruit in these

19 containers are used by fruit stands so that

20 consumer, so that the consumer, so the

21 consumer may choose their own fruit versus

22 fruit packed in cartons or bagged.

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1 The proposals to regulate

2 intrastate shipments, proposal number two, and

3 the proposal, proposal number seven, to

4 regulate containers and intrastate shipments

5 separately from interstate and export

6 shipments, would have no immediate impact on

7 growers, handlers or consumers. The industry

8 is currently regulating intrastate shipment in

9 containers through state regulations.

10 However, the fresh Florida citrus industry has

11 determined having the federal authority in

12 place would ensure quality standards remain if

13 the state authority is dropped.

14 This authority will not be

15 implemented unless state regulations are no

16 longer in effect. The proposed amendments do

17 include regulating intrastate shipments,

18 containers and different quality standards

19 within the production area would not have an

20 adverse effect on small businesses if

21 approved. Adding the authority to regulate

22 intrastate shipments would have no direct cost

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1 to the industry. If implement at current

2 intrastate shipment level the committee would

3 collect grower assessments from shippers on

4 the approximately two million cartons,

5 additional cartons of fresh Florida citrus,

6 which are shipped to intrastate markets on

7 approximately six percent, or approximately

8 six percent of Florida's fresh citrus

9 shipments.

10 However, the net cost to the

11 industry may be negligible, or could even be

12 lower, as these costs would shift from the

13 state to the order. As presented earlier in

14 testimony, the industry supports these

15 proposals as it authorizes all fresh fruit

16 regulation for Florida citrus to be authorized

17 under the order for the Florida fresh citrus

18 grower and shipper, if the Florida citrus

19 industry chooses to move in that direction in

20 the future. As stated earlier, it is another

21 tool for the Florida citrus fresh fruit grower

22 to have in their toolbox. Thank you.

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1 JUDGE CLIFTON: Well done, Mr.

2 Roe. What questions does anyone from USDA

3 have for Mr. Roe? Ms. Schmaedick?

4 EXAMINATION

5 BY MS. SCHMAEDICK:

6 Q Thank you, Mr. Roe, for your

7 testimony. One of the questions I have for

8 you is can you provide examples of where pack

9 and container regulations might need to be

10 different for different markets? Do you have

11 an example that you can give to us?

12 A No, ma'am.

13 Q As far as marking, one of the

14 proposed changes is to include labels and

15 stamps as a form of marking on containers.

16 Could you provide me with more specific

17 examples of what those might be like, labels

18 and stamps, why would they be used or what

19 would they look like?

20 A Let me defer to Mr. Chadwell.

21 JUDGE CLIFTON: Mr. Chadwell?

22 MR. CHADWELL: Arthur Chadwell.

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1 These were just the stickers.

2 JUDGE CLIFTON: Microphone.

3 MR. CHADWELL: Referring to just

4 the type of identification that we put on the

5 fruit, marking, when we mark each fruit with

6 labeling and stickers, so we're just covering

7 the bases, not such much as what's being done,

8 we just make sure that this authority was

9 there as we, as our industry changes, and with

10 new varieties and looking forward to how we

11 promote them, advertise them and identify

12 them. We wanted to make sure that they may

13 have different containers and may be different

14 marking requirements and labeling pieces of

15 fruit for better identification. So, we just

16 wanted to be inclusive that this language was

17 there moving forward if we so need in the

18 promotion and marketing and identifying fruit

19 for the customers, as these are going to be

20 new varieties.

21 MS. SCHMAEDICK: Thank you for

22 that clarification. So, currently you don't

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1 have a situation where, for example you have

2 an export market that needs a particular type

3 of container and it is different from

4 something you would use for your domestic

5 market?

6 MR. CHADWELL: Not currently.

7 MS. SCHMAEDICK: But, if I'm

8 understanding you correctly, there is that

9 potential?

10 MR. CHADWELL: There is a

11 potential, and now knowing what the future

12 holds we just tried to cover the bases. As

13 marketing changes and the word is changing, so

14 to speak, we just want to make sure there was

15 an authority, if needed, that we could rely

16 upon, or come to use.

17 MR. HAMNER: Melissa, this is

18 George Hamner. I think what, we have

19 different markets with different containers

20 and markings now, but it's not regulated, it's

21 by choice of shipper, customer, et cetera.

22 Into the future there was a consideration

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1 given that maybe with new varieties, if we do

2 advertising, we may want an XYZ sticker to go

3 on a tangerine by requirement to go to that

4 tangerine for identity if we have different

5 things. At present we do not have a

6 regulation like that. So that's why that,

7 looking into the future, we were trying to get

8 this done.

9 MS. SCHMAEDICK: Thank you. In

10 reviewing the proposed changes to the

11 definition of handler, or handled, excuse me,

12 it would be Section 905.9 of the order, I

13 understand that the term consigned will be

14 removed. Can you tell me if that activity,

15 the act of consignment, would be captured in

16 the revised definition of to handle?

17 THE WITNESS: I'm going to defer

18 to Mr. Chadwell.

19 MR. CHADWELL: What section is

20 that?

21 MS. SCHMAEDICK: 905.9, the

22 definition that is currently in the CFR, it

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1 includes the term to sell or consign under the

2 act of handle of ship. Is that something that

3 is, is that a term that is outdated and are

4 you upgrading the definition?

5 MR. CHADWELL: Melissa, it's too

6 late to give, catch a curve or --

7 MS. SCHMAEDICK: I apologize.

8 MR. HAMNER: Consigned is left

9 out.

10 MS. SCHMAEDICK: Yes, is that on

11 purpose?

12 JUDGE CLIFTON: Mr. Hamner, just

13 so we know who you are.

14 MR. HAMNER: George Hamner.

15 Within industry norm I don't think, probably

16 it would be considered outdated, but the

17 reality, because handling fruit, buying,

18 flooring, selling, I mean all of it gets

19 lumped together now to us. I mean, consigned

20 would just be one entity, and so to me if

21 they, if you pulled it out its probably,

22 that's what I would have assumed. I didn't

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1 realize it.

2 MR. CHADWELL: Arthur Chadwell. I

3 don't remember ever discussing consigned, so

4 it may have just slipped through the cracks

5 and not be there, because that was never in

6 any of our discussions at all, we never

7 discussed consigned. So, that, if it's

8 omitted, that word would have been omitted

9 inadvertently.

10 MS. SCHMAEDICK: Thank you, I

11 believe that concludes my questions for

12 proposal to seven. Thank you.

13 JUDGE CLIFTON: All right, and do

14 you have any for proposal seven.

15 MS. SCHMAEDICK: No, Your Honor,

16 I'm finished, thank you.

17 JUDGE CLIFTON: All right. Say it

18 again, Ms Varela.

19 EXAMINATION

20 BY MS. VARELA:

21 Q Jenny Varela, USDA. Mr. Roe, I

22 hopefully just have a couple quick questions

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1 for you so you can finish up. I want to ask

2 you some questions regarding your time you

3 served on the commission, just to get an idea

4 of how they function. We have already

5 established that there is really a small

6 percentage of fruit that is sold as fresh. I

7 would imagine that fruit sold within the state

8 that is fresh is an even smaller percentage.

9 Would you say that that makes their fresh

10 regulations kind of not the most important

11 item of discussion with the commission, do

12 they tend to focus on other issues first?

13 A Oftentimes that is true.

14 Q And in your opinion if, if they

15 did decide to do away with regulations is that

16 something, now that it's in the rules that

17 they can make decisions on, they could decide

18 one day through a vote to just get rid of the

19 regulation, correct? It wouldn't have to go

20 through the legislature anymore?

21 A I believe that is correct.

22 JUDGE CLIFTON: Before you ask

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1 your next question, who else said that's

2 correct?

3 MR. HAMNER: Sorry, George Hamner,

4 that is correct.

5 BY MS. VARELA:

6 Q So, do you see making this type of

7 decision to add the authority to the order now

8 as a way of kind eliminating the time it would

9 take to add it later? I think you said early

10 in your testimony that we've talked about this

11 for about 16 months. So do you as an active

12 member of the industry thing it's important to

13 have this in place before the commission takes

14 a step like that, if they ever do?

15 A I think that's a prudent move for

16 the fresh food industry in Florida.

17 Q Thank you.

18 JUDGE CLIFTON: Does anyone else

19 from USDA have questions for Mr. Roe? Does

20 anyone else in the room have questions for Mr.

21 Roe? Mr. Roe, do you agree with Ms. Varela's

22 assumption that the intrastate sales of citrus

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1 may in fact have even a smaller percentage of

2 fresh fruit? Do you have any basis of

3 measuring one way of the other on that?

4 THE WITNESS: Intrastate is fruit

5 that's just sold within the State of Florida,

6 that's a much smaller volume of fruit than is

7 sold throughout the rest of the country and

8 the rest of the world.

9 JUDGE CLIFTON: All right, would

10 the proportion of fresh fruit be any different

11 from the interstate and export sales?

12 THE WITNESS: I'm not sure I

13 understand the question.

14 JUDGE CLIFTON: All right, let's

15 assume just for a minute that, I don't know,

16 80 percent of the citrus that goes out of

17 Florida to other states or internationally is

18 processed, assume that, 80 percent of it is

19 processed and 20 percent of it is fresh.

20 THE WITNESS: Okay.

21 JUDGE CLIFTON: Do you have any

22 reason to believe that percentages would be

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1 any different for intrastate sales?

2 THE WITNESS: I think this is an

3 apple and orange question, okay. All the

4 processed fruit sold in the state is processed

5 in the state, so it's not shipped out of the

6 state to process.

7 JUDGE CLIFTON: Okay.

8 THE WITNESS: So, all the fruit

9 that leave the state as fruit is fresh fruit.

10 You do not have any processed fruit that

11 leaves the state as fruit, it leaves the state

12 as a manufactured product. So I still might

13 not understand your question.

14 JUDGE CLIFTON: Yes.

15 MR. HAMNER: Your Honor, let me,

16 can I try and answer?

17 JUDGE CLIFTON: Yes, would you

18 please, Mr. Hamner.

19 MR. HAMNER: This is George

20 Hamner. I think what you're looking for is

21 this proportion between what was intrastate

22 versus interstate.

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1 JUDGE CLIFTON: What I thought Ms.

2 Varela asked him to assume, what I thought she

3 asked him to assume is that the proportion of

4 sales that are fresh might even be lower for

5 the intrastate sales.

6 MR. HAMNER: Right, if you looked

7 at sales as one entity now and forget about

8 interstate and intrastate for a moment as a

9 number, 100, and interstate is 80 percent and

10 intrastate would be 20 percent, for instance.

11 Whether this rule goes through or not, the

12 proportion that is intrastate, which is very

13 small, versus what goes interstate, will stay

14 the same. I mean the intrastate shipments,

15 just because of population, delivery, et

16 cetera, is a very small portion of fresh fruit

17 sales, and it stays proportionate each year.

18 JUDGE CLIFTON: All right, thank

19 you for that. And I may have totally

20 misunderstood Ms. Varela's question and what

21 she wanted him to assume.

22 MR. HAMNER: It sounded like to me

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1 what she wanted was, is within the commission

2 is that intrastate sales is even less of an

3 item that they look at and talk about, versus

4 the other fresh fruit sales, it's even lower.

5 If fresh fruit sales is a lower entity or

6 lower picture in the Department of Citrus

7 versus processed product, then intrastate

8 would be even smaller.

9 JUDGE CLIFTON: Is that what you

10 were alluding to, Ms. Varela?

11 MS. VARELA: Correct.

12 JUDGE CLIFTON: All right, thank

13 you all. Mr. Chadwell?

14 MR. CHADWELL: Arthur Chadwell.

15 Not to belabor the point, but it would be two

16 million cartons historically for, it means a

17 million boxes, which when we have 170 million

18 box productions it's very minuscule and is

19 not, and is not even on the radar for the

20 Department of Citrus.

21 JUDGE CLIFTON: Very helpful all

22 of you, thank you. All right, what other

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1 questions for Mr. Roe? Are there any

2 objections to the admission into evidence of

3 Exhibit 26? There are none. Exhibit 26 is

4 admitted into evidence. Thank you, Mr. Roe.

5 And the next witness, you may approach. I'm

6 going to mark the document that is entitled

7 Larry Black testimony as Exhibit 27. And I'll

8 swear you in seated. Would you raise your

9 right hand, please. Please state and spell

10 your name.

11 (Whereupon, Exhibit No.

12 26 was received into

13 evidence.)

14 (Whereupon, Exhibit No.

15 27 was marked for

16 identification.)

17 Whereupon,

18 NORMAN LARRY BLACK, JR.,

19 called as a witness herein, after having been

20 first duly sworn, was examined and testified

21 as follows:

22 THE WITNESS: Norman Larry Black,

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1 Jr. N-o-r-m-a-n, Larry, L-a-r-r-y, Black, B-

2 l-a-c-k, junior.

3 JUDGE CLIFTON: Thank you, you may

4 proceed.

5 TESTIMONY BY NORMAN LARRY BLACK, JR.

6 THE WITNESS: Good afternoon, my

7 name is Larry Black, I reside at 1860 Pinnacle

8 Drive, Lakeland, Florida. I'm a small grower

9 producing oranges, tangerines and grapefruit

10 on 220 acres. I'm also the General Manager of

11 Peace River Packing Company, which has been in

12 our family for 85 years and is located in Ft.

13 Meade, Florida.

14 Peace River Packing Company grows,

15 harvests and packs Florida citrus from our

16 family's 2,000 acres of groves and also for

17 outside growers. Peace River Packing would be

18 considered a large shipper according to the

19 SBA definition. I'm a shipper member of the

20 committee, a board member of Florida Citrus

21 Mutual, the Florida Citrus Packers and the

22 Citrus Research and Development Foundation,

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1 Incorporated.

2 Proposal nine would amend Section

3 905.7 to provide for the registration of

4 handlers, which would aid the committee in

5 compliance and increase communication by

6 keeping shippers better informed of provisions

7 of the order. The revision to Section 905.7,

8 handler, handler is synonymous with shipper

9 and means any person, except for a common

10 contract carrier transporting fruit for

11 another person, who as owner, agent or

12 otherwise, handles fruit in fresh form, causes

13 fruit to be handled, each handler shall be

14 registered with the committee pursuant to

15 rules recommended by the committee and

16 approved by the secretary. The State of

17 Florida Department of Citrus, Chapter 601,

18 Florida Statues, Florida Citrus Code 601.4,

19 requires each packing house or shipper that

20 prepares Florida citrus for fresh market in

21 Florida to register annually with the Florida

22 Department of Agriculture through the division

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1 of fruit and vegetables.

2 In addition, Section 601.56,

3 Florida Statutes, or the Florida Citrus Code,

4 requires Florida citrus shippers, as a citrus

5 fruit dealer in Florida, be approved by the

6 Department of Citrus for a citrus fruit

7 dealers license. What the committee is

8 proposing would not replace these requirements

9 as authorized by the Florida Citrus Code. The

10 committee's propose this amendment to

11 strengthen the order's compliance with

12 shippers.

13 Section 905.53, inspection and

14 certification of the order, requires each

15 shipper to have each lot of citrus inspected

16 by the Florida Department of Agriculture

17 Division of Fruit and Vegetables, also known

18 as the division. The division certifies that

19 the lot of fruit means all applicable

20 requirements of the order as recommended by

21 the committee and approved by the secretary.

22 Florida Department of Citrus rules, chapter

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1 20.4, describes the information required to be

2 entered on the manifest, who it issues the

3 manifest, and certificate of inspection. The

4 inspector certifies on the manifest all the

5 pertinent information for that lot of citrus.

6 This includes certifying the lot meets the

7 regulatory requirements of the order, which

8 refers to minimum grade and size as authorized

9 by the secretary. Each shipper and inspector

10 has a copy of the most current CAC regulation

11 bulletin, which are updated each time the

12 committee recommends and the secretary

13 approves a regulation change.

14 A copy of the manifest goes with

15 each certified lot of citrus shipped to

16 regulated markets. The committee contracts

17 annually with the division to furnish the

18 committee, by month, each shippers regulated

19 shipments, both interstate and export, and

20 that's inter, i-n-t-e-r, state and export.

21 And these shipments are used to calculate each

22 shippers assessment. It is also from the

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1 manifest that we get the entire grade and size

2 information for each regulated shipment.

3 The committee has not experienced

4 major compliance issues in the past, but is

5 always looking for ways to improve compliance

6 of the orders regulations and the collection

7 of assessments. Each season the committee

8 conducts a review of the CAC compliance plan,

9 known as the compliance plan, and the CAC

10 internal control policies, known as internal

11 controls, and updates if needed, both to

12 improve it's compliance procedures. Upon the

13 committee's approval of the compliance plan is

14 forwarded to the USDA for their review and

15 approval. The internal controls are approved

16 and forwarded to the USDA.

17 Both the compliance plan and

18 internal controls are implemented by the

19 committee's management throughout the season

20 as each plan mandates. There are procedures

21 in both the compliance plan and internal

22 controls to ensure handlers are fully informed

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1 of any violations and are given time to take

2 corrective actions. In the very limited cases

3 of minimum grade and size regulation

4 violations, the majority of the reported

5 violations have been less than a pallet, which

6 would be equivalent to 54 cartons of citrus.

7 In the past, most of the violations have been

8 clerical errors by the shipper's shipping

9 department. In the last few seasons, with

10 most shippers using bar coding systems for

11 loading trucks or containers, these violations

12 have all but been eliminated.

13 JUDGE CLIFTON: Have all but been

14 eliminated, so almost?

15 THE WITNESS: Exactly, they're

16 very minimal and clerical in nature.

17 Collection of the committees assessments

18 should be enhanced, could be enhanced by using

19 the registration of shippers as a tool to

20 ensure compliance with the assessment

21 provision of the order.

22 It must be noted, the committee

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1 recommends an assessment fee to cover it's

2 expenses in the administration of the order

3 and as approved by the secretary. Shipper

4 collect the assessment fee from their growers,

5 so shippers should remit those assessments in

6 a timely manner. The committee has not

7 experienced many late or uncollectible

8 assessments, but feel this proposal could aid

9 in the collection of assessments. The

10 committee does outline in the compliance plan

11 a detailed time line for the collection of

12 those assessments, which ensure due process

13 for the shipper to comply with the committees

14 collection of past due assessments.

15 The committee will develop a

16 shipper registration form, which would include

17 contact information along with other pertinent

18 information deemed necessary for the operation

19 of the order. A notice and comment period

20 would be provided for the industry to comment

21 on the registration form. The information

22 from the shipper registration form will

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1 provide valuable contact information, be

2 beneficial in communication, and assist in the

3 compliance provisions of the order. Since

4 this is an administrative proposal, the cost

5 to the order and shippers will be negligible

6 and will require limited time by the shipper

7 to complete the registration form. This

8 proposal is not controversial and there is

9 support within the industry.

10 In closing, there are a few main

11 points that should be noted. First, this is

12 another tool Florida citrus growers that

13 market their fruit in the fresh channel of

14 trade would have available as our industry

15 works to meet challenges that lie ahead. This

16 would provide more efficient communication

17 with shippers, the committee would continue to

18 review and update our compliance plan and

19 internal controls annually to ensure shippers

20 are afforded due process in the handling of

21 order violations, and also strengthen the

22 compliance provisions of the order. And last,

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1 there is support within our industry for this

2 proposal.

3 In closing, the Florida citrus

4 growers producing fruit for the fresh market

5 have supported the order for 74 years, and the

6 proposed amendment will afford the committee

7 more options in the administration of the

8 order. Mr. Chadwell will give an overview of

9 how the committee would implement this

10 proposal.

11 JUDGE CLIFTON: Do you, Mr.

12 Chadwell, want to add anything before I invite

13 questions?

14 MR. CHADWELL: I think it might

15 help, because I think it's going to clarify a

16 few things.

17 JUDGE CLIFTON: You may proceed,

18 and you may stay there.

19 MR. CHADWELL: I will come up

20 there because I've got a few things to hand

21 out.

22 JUDGE CLIFTON: All right, then

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1 let's go off record. Now, should Mr. Black

2 remain seated?

3 MR. CHADWELL: He can be

4 dismissed.

5 JUDGE CLIFTON: He can step down?

6 MR. CHADWELL: Yes.

7 JUDGE CLIFTON: All right, thank

8 you so much, Mr. Black. Please stay because

9 you may have questions after Mr. Chadwell

10 speaks, thank you. And let's go off record

11 while Mr. Chadwell distributes what he's got.

12 (Off the record.)

13 JUDGE CLIFTON: All right, we're

14 back on record, it's 5:56, and Mr. Black, I'm

15 aware that in four minutes you have to slip

16 away and I understand that. So, if we don't

17 get to ask you questions it's okay. All

18 right, you remain sworn, and would you again

19 state and spell your name.

20 Whereupon,

21 ARTHUR B. CHADWELL,

22 recalled as a witness herein, having been

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1 previously sworn, testified as follows:

2 THE WITNESS: Arthur Chadwell, A-

3 r-t-h-u-r, C-h-a-d-w-e-l-l.

4 JUDGE CLIFTON: Thank you, you may

5 proceed.

6 MR. HILL: Your Honor, if we

7 could, we'd like to ask him just a few

8 questions before he --

9 JUDGE CLIFTON: All right, let me

10 interrupt you Mr. Chadwell and do you want to

11 begin? Ms. Schmaedick, you may ask questions

12 that you have for Mr. Black.

13 EXAMINATION

14 BY MS. SCHMAEDICK:

15 Q Thank you, Mr. Black for your

16 testimony, and I'll say I can appreciate

17 needing to pick up your child, so I will be

18 brief.

19 A Thank you.

20 Q I understand that you're a small

21 grower, and I believe that you may be the only

22 small grower who has testified today, so I

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1 appreciate you taking time to answer

2 questions. In your capacity as a small grower

3 do you support all of these proposals?

4 A I do.

5 Q Not just number nine that you

6 testified to?

7 A I do, I'm aware and have been

8 involved in the process and feel the industry

9 is well aware of the proposals. They've been

10 vetted within the industry and they're good

11 for our future.

12 Q And have you interacted with other

13 small growers or small handlers?

14 A Yes.

15 Q And in your opinion do they also

16 support, specifically, the small grower

17 entities?

18 A Specifically the grower component,

19 I've interacted with other small growers and

20 all are in full support that I've interacted

21 with.

22 Q Do you anticipate any negative or

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1 increase in costs as a result of these

2 proposed amendments?

3 A I believe the changes that are

4 proposed will make the CAC more efficient and

5 will actually lower cost for the industry

6 going forward.

7 Q And in your opinion, in general

8 has the marketing order provided you support

9 as a small grower entity, has it been

10 beneficial to you?

11 A Absolutely.

12 Q Thank you for your time, I have no

13 further questions.

14 A Thank you.

15 JUDGE CLIFTON: Thank you, Ms.

16 Schmaedick. Mr. Hill?

17 MR. HILL: Thank you, Your Honor.

18 JUDGE CLIFTON: That's all? Any

19 other questions of Mr. Black before he leaves?

20 All right, thank you so much Mr. Black, that

21 was important, thank you for doing that while

22 he was still here. Did I admit into evidence?

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1 All right, is there any objection to the

2 admission into evidence of Exhibit 27, which

3 is Larry Black's testimony? All right,

4 Exhibit 27 is admitted into evidence. Now,

5 Mr. Chadwell, back to you.

6 (Whereupon, Exhibit No.

7 27 was received into

8 evidence.)

9 THE WITNESS: My name is Arthur

10 Chadwell, I reside at 723 Success Avenue,

11 Lakeland, Florida. I am the Manger of the

12 Citrus Administrative Committee, and I have

13 few comments on the registration of shippers.

14 I have included a copy of the Florida

15 Department of Agriculture and Consumer

16 Services FDACS Division of Fruit and Vegetable

17 Inspection Manifest, it is the legal sized

18 document which provides the documentation

19 required by the order, as well as the Florida

20 Department of Citrus rules.

21 This is a document that provides

22 the committee with shipment information by

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1 completed, by documents, the shipment

2 information, well I don't, it's completed by

3 a document of fresh shipments as well as a

4 sample of the sample shipper registration

5 form.

6 MR. HAMNER: Would you like

7 Kathleen to re-write that?

8 THE WITNESS: Is there any

9 questions?

10 JUDGE CLIFTON: Pardon? Just

11 leave it like it is, it's fine.

12 THE WITNESS: I thought it was

13 important that, this is very much on the

14 administrative side of the committee and

15 that's why I chose to go, to present this

16 additional information that I am most familiar

17 with. It benefits the committee, improves

18 communication amongst, with growers, it aids

19 committee with compliance, those are the two

20 main issues for this. Shipper registration,

21 the shipper registration, and I have included

22 a sample form that we have developed, but

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1 shipper registration will be completed by the

2 shipment. The shipper must have a Florida

3 citrus fruit dealers license, as Mr. Black has

4 presented in his testimony. It would provide

5 the committee with contact information, a

6 physical address for their packing facility,

7 a billing address approved by the manger, and

8 then the committee would post-approve my

9 actions in approving the registrations.

10 Fresh shipments time frame, to

11 reiterate fresh shipments begin in late

12 September to early October. 95 percent of the

13 fresh shipments occur October through April.

14 The majority of the shippers have completed

15 shipments by late April. Five percent of the

16 fresh shipments occur after, in April through

17 June. And there is approximately anywhere

18 from 60 days to 150 days between seasons.

19 Due process for shippers, our

20 discussion of this way back in developing this

21 was concerned that, what kind of due process

22 would we have. We have the internal control

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1 policies which are reviewed and approved

2 annually, in their internal controls invoicing

3 policies are in the internal controls. Each

4 season the committee reviews and submits the

5 CAC compliance plan to the secretary for

6 approval. The compliance plan outlines time

7 frames for collection of assessment, and it

8 states in there payments are due 30 days after

9 invoice date, past due, first past due notices

10 are mailed after the 30 days, and second past

11 due notices are certified, or mailed certified

12 mail after 40 days.

13 In summary, this is going to be an

14 aid to support compliance. It's cost neutral,

15 promotes communications with shippers and is

16 supported by the industry. I also have

17 included just, I thought it would be good for

18 the record that I have included a copy of the

19 manifest, which is the legal document for the,

20 that is for the division of fruit and

21 vegetable, which is authorized under the order

22 as I mentioned earlier, and this contains the

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1 pertinent information required for regulation

2 of shipments. And this document is certified

3 by the division, before we get the information

4 that we use in the collection of assessments,

5 and also if there were a violation of any

6 greater sized regulations. So, I just wanted

7 to show that it's a very detailed document,

8 nothing would change in our registration of

9 shippers that would, that we would still use

10 this document, and so it wouldn't be any

11 change.

12 The other thing I've included is a

13 regulation bulletin just to show, I just

14 mentioned a time or two, by varieties that are

15 regulated what the minimum grade size and if

16 they're interstate or export. And I just

17 thought it would be good for the record to

18 have the documentation of what we put out as

19 the regulations required by, when recommended

20 by the committee and approved by the Secretary

21 of Agriculture. So, I'm open to any questions

22 that you may have.

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1 JUDGE CLIFTON: All right,

2 questions for Mr. Chadwell on this part of his

3 testimony? Ms. Schmaedick.

4 BY MS. SCHMAEDICK:

5 Q Thank you Mr. Chadwell for your

6 presentation. Can you tell me, in the

7 development of this proposal was there any

8 research done on other agricultural marketing

9 order programs that have this authority?

10 A Yes, in the development of this we

11 used the Florida Tomato Committee, yes, the

12 Florida Tomato Committee and their marketing

13 order. So, we were, we didn't try to, we used

14 language that had already been approved in a

15 different marketing order and had been

16 successfully used. So, we went to language

17 that was in an order that had been working for

18 an order and for an industry, that's where we

19 modeled this from.

20 Q And did you have or enter into any

21 discussions with that industry in terms of the

22 successfulness of that authority?

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1 A In the past year I have talked to

2 Reggie Brown, the manager of the Florida

3 Tomato Committee, and talked to him about it's

4 effectiveness for his industry, and he thought

5 it was a very good tool, and suggested that it

6 would be a good tool for our industry.

7 Q Do you anticipate a situation

8 where there may be a, well first of all let me

9 ask for clarification, what happens if you

10 have this handler registration authority in

11 effect, what happens if a handler does not pay

12 their assessments?

13 A That's why I put, if you'll notice

14 that's what, in our, we are approximately a

15 six month industry, and so because we, when we

16 assess a shipper it is on certified,

17 documented shipments. So there is a time

18 lapse, so when we start shipping in October

19 it's almost the end of November, a three to

20 four week time frame before we get the

21 certified numbers. So there's, we're always

22 playing catch up so to speak. And so our

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1 season, as I mentioned earlier, ends in March

2 to April, and so those billings would go out,

3 by then as the shipments are declining the

4 certification process speeds up. But in, our

5 physical year ends July 31, and so we would

6 have, the shipper would have time to, you

7 know, go through our due process. Then we

8 have, with the season starting in last

9 September, October, there is that, almost 150

10 day time frame from when they last did their

11 shipments, when we could, you know, do the due

12 process on billing, and before they start

13 again. And so because of that length of time

14 frame we feel that, you know, that a shipper

15 would have more than enough due process to pay

16 their assessments, before the beginning of

17 another season.

18 Q And what would happen if they did

19 not pay those assessments?

20 A I would anticipate, of course this

21 just give us authority, we would have to write

22 those rules, but my anticipation was that any

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1 marketing order violation, be it a grade size

2 violation and or an assessment, after due

3 process they would have to clear it up before

4 they could be issued a license to operate.

5 Q So, for clarification, are you

6 saying that they, if they were in violation,

7 having not paid their assessments, that they

8 could potentially not be able to ship outside

9 of the State of Florida?

10 A I would say so, yes. To me it

11 would be any regulated area, anywhere that we

12 regulate the fruit they would not be able to

13 ship to interstate or export markets.

14 Q Would they be able to ship within

15 the State of Florida, as long as DOC regulated

16 it?

17 A Yes, because that is not, we do

18 not regulate that fruit, so yes, that would

19 not be part of it, under the existing law

20 without the intrastate regulation, that's

21 correct. But the DOC has their own collection

22 in the State of Florida, as you would suspect,

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1 have their own due process on this. This was

2 mainly put in, just there again, to have the

3 authority to use as a tool for compliance and

4 not knowing what lies ahead. But we thought

5 it was a good idea, the industry did, to have

6 shipper registration, to just give us one more

7 layer of control on compliance. And also, a

8 more important tool to be able to communicate

9 with those shippers.

10 Q Within your industry are there

11 currently examples of handler not paying

12 assessments?

13 A We, the industry has a very good

14 track record on handlers paying assessments,

15 to say it is a problem that's not so.

16 However, in the tough economic times there

17 are, from time to time, shippers that go out

18 of business at the end of the season, and

19 without notice. And so this is, and it's

20 usually at the end of the season, and so

21 there's a lag in getting the certified numbers

22 and all. So, from time to time there are

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1 cases where shippers have gone out of business

2 and left the marketing order with unpaid

3 assessments. But at the same token, by that

4 state, they've left growers, the Department of

5 Citrus, the Department of Agriculture,

6 everybody in, we're not alone. You'll find

7 out that when a shipper, a handler that is in

8 financial trouble, be in financial trouble

9 with everyone, starting with the grower most

10 of the time.

11 MR. HAMNER: Melissa, can I, this

12 is George Hamner. But when we did this at the

13 committee level it was after we considered

14 intrastate, which is now here, we considered

15 it and we had done increased assessment

16 potential, this was kind of the last thing in

17 line. For the future, if we decide, if the

18 DOC did not exist and we had to have some form

19 or fashion to protect the CAC in collecting

20 assessments that we don't have today. The

21 anticipation would be registration would be

22 like a license, you couldn't ship without it

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1 if you didn't pay your bills. That was in a

2 nutshell. But we haven't written, because

3 that, we haven't gotten to the point of that,

4 we haven't written any of the, that kind of a

5 compliance penalty since it's only

6 authorization to do so.

7 BY MS. SCHMAEDICK:

8 Q Thank you for that clarification.

9 Mr. Chadwell, have you found that the, what

10 you describe as a due process that you

11 currently have within your compliance plan, is

12 that effective, the outline of time lines and

13 notices?

14 A Yes, it's, we've been effective in

15 collecting assessments, except for those cases

16 where they go out of business and close, just

17 close their doors. And then that time, and

18 most of those end up in bankruptcy. But yes,

19 we are successful in collecting, it's just

20 that every now and then you get a shipper

21 that, in most cases these are people that come

22 into the business for a year or two and then

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1 out. As you heard today, most of these

2 businesses have been around for decades. But

3 the cost of getting in the business now we

4 have fewer people coming in, just because of

5 the decline in production and shipments. But

6 every now and then you'll get somebody that

7 starts up, and is not as familiar with the

8 regulations, all regulations not just ours.

9 So, we thought this would be a tool that we

10 could use, and we felt comfortable with the

11 time frame between when we end the season and

12 when we start, that that gave plenty of time

13 for the due process to be served to the

14 handler. Because these, technically the

15 handler is taking the assessment from the

16 grower returns. So it's the grower's money

17 that they are not remitting to us.

18 Q Thank you, no further questions,

19 thank you.

20 JUDGE CLIFTON: Mr. Chadwell, do

21 you have anything you'd like to add?

22 THE WITNESS: No, I guess the only

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1 thing is that we were, in discussing this and

2 bringing it forward we were very conscious of

3 the due process to make sure that handlers

4 were afforded the opportunity. And we felt

5 that as we stated within our time frames and

6 the 30 day first notice, then the second

7 notice and by noticing with certified mail,

8 that we were affording ample time to and due

9 process for handlers. And this, and then when

10 the registration would not occur the first

11 day, August 1, it would occur when they were

12 getting ready to ship. So, that adds another

13 60 days, so we felt that there was going to be

14 ample time if and when we ever had to pull a

15 registration, to clarify that before the

16 beginning of a season.

17 JUDGE CLIFTON: Are there any

18 questions of Mr. Chadwell on any of these

19 exhibits or this part of his testimony from

20 anyone? Is there any objection to the

21 admission into evidence of Exhibit 28? There

22 is none. Exhibit 29, which is the power

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1 point? There is none. Exhibit 30, which is

2 the registration form? Exhibit 31, well wait

3 a minute, what is 30, 30 is not the

4 registration form, it's the manifest?

5 THE WITNESS: It's the manifest.

6 JUDGE CLIFTON: It's the manifest,

7 thank you. 31, which is the registration

8 form, or 32, what do I call 32, Mr. Chadwell?

9 THE WITNESS: That's a regulation,

10 Citrus Administrative Committee bulletin.

11 JUDGE CLIFTON: A regulation

12 bulletin, all right. Is there any objection

13 to any of those being admitted into evidence?

14 There is none, Exhibits 28, 29, 30, 31 and 32

15 are admitted into evidence. Is there any

16 other evidence to come before this proceeding?

17 Mr. Hill?

18 (Whereupon Exhibits No.

19 28 through 32 were

20 marked for

21 identification and

22 received into evidence.)

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1 MR. HILL: There is no evidence, 1

2 through 32, that's fine --

3 JUDGE CLIFTON: Yes, you may do

4 that now, do you want to do anything further?

5 MR. HILL: Just to propose that we

6 very much make the proposed changes --

7 necessary to --

8 JUDGE CLIFTON: All right, very

9 good. I'd like to make two comments. One is

10 transcript will be posted on an agricultural

11 marketing service website, the exhibits will

12 be posted, the proposals to correct the

13 transcript should be posted there to if anyone

14 has any proposals to correct the transcript.

15 Those are not made to improve people's

16 grammar, those are not even made to correct a

17 witnesses mis-statement. The only reason for

18 transcript corrections is if the court

19 reporter got it wrong. So, even if it's a bit

20 of a mess, we leave it that way and the people

21 who are putting together the orders know that.

22 And it's not necessary that a persons written

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1 testimony match what was said from the witness

2 stand, rather the person who is making use of

3 it can look at both of them and figure out

4 what to use.

5 So, there shouldn't be a lot of

6 transcript corrections. But if people's names

7 are spelled wrong and you know the right name

8 you should fix it, or if the court reporter

9 just mistook the word, got it wrong, then we

10 need to fix it. All right, do we know were

11 people would look on the website to find the

12 proceedings from this hearing, what part of

13 the website they will go to?

14 MS. SCHMAEDICK: This is Melissa

15 Schmaedick. On the marketing order and

16 agreement division website there are specific

17 links to each marketing order program. If one

18 were to click on the marketing order 905, all

19 information will be listed on that particular

20 page.

21 JUDGE CLIFTON: Excellent, very

22 good, all right, great. Now, I'll now

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1 entertain anything further that we need to put

2 on the record before we break down and depart.

3 Ms. Schmaedick?

4 MS. SCHMAEDICK: Will there be an

5 opportunity to file briefs?

6 JUDGE CLIFTON: Yes, normally the

7 transcript will take about 30 days before you

8 have it in your hand. You should have the

9 opportunity to consider it and file any

10 corrections and briefs. Some people like to

11 do that as one package, while their writing

12 their brief they're looking for corrections to

13 the transcript. Anything you want to do is

14 fine and any time table is fine, so long as

15 you do it from receipt of the transcript. So,

16 I can set parameters now if you want them, and

17 then for example, let's find out first do you

18 want to make your proposed transcript

19 corrections simultaneously with submitting a

20 brief? First of all, let's find out, who

21 might be submitting briefs? Let's go off

22 record for just a moment.

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1 (Off the record.)

2 MR. HAMNER: We found out if

3 you're not, you miss a meeting you get to be

4 chairman, you volunteer you get to be

5 something else, so no.

6 JUDGE CLIFTON: We're back on

7 record, it's 6:22. So, some of the things

8 that we might do, for example, is the

9 transcript is deposited with the hearing

10 clerk, along with the invoice. The hearing

11 clerk then keeps the original as the record

12 copy, and then forwards the copies that the

13 agricultural marketing service ordered, and

14 forwards the bill to the agricultural

15 marketing service. That, the date that the

16 hearing clerk receives the transcript is

17 identifiable. So you could measure from that

18 date and for example say proposals to correct

19 the transcript would be due 45 days after the

20 transcript is deposited with the hearing

21 clerk.

22 You could also say, and then I

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1 would expect the government to help there, as

2 well as the industry, then you could either

3 have your briefs due at that same time, or

4 later than that. So, what would you prefer,

5 for example, Mr. Chadwell, since you might be

6 writing one? Do you think 45 days will be

7 enough, consider where you are in the

8 calendar.

9 MR. CHADWELL: Yes.

10 JUDGE CLIFTON: I know you're

11 busier at some times than others.

12 MR. CHADWELL: 45 days would be

13 fine.

14 JUDGE CLIFTON: Okay, now at 45

15 days, will probably start about 30 days from

16 now, maybe a little shorter.

17 MR. CHADWELL: You get tier one in

18 30 days, tier two is 45 days.

19 JUDGE CLIFTON: All right, then

20 I'm going to order that proposed transcript

21 corrections, if you have any. Now, you don't

22 have to make immaterial proposals, you don't

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1 have to do misspellings, but it's helpful if

2 its peoples names. So, there don't have to

3 be, you don't have to correct everything in

4 the transcript, but material changes, things

5 that would make a difference in the outcome

6 should be addressed, if the court reporter got

7 it wrong. If the court reporter got it right,

8 but you know its wrong, you should address it

9 in your brief. Such and such was said, that's

10 not true.

11 All right, so both the proposed

12 transcript corrections and the briefs should

13 be filed with the hearing clerk no later than

14 45 days after the hearing clerk receives the

15 transcripts from the court reporter. Then

16 what I do is I certify the transcript, which

17 actually means I say what the transcript

18 consists of, what corrections I approve and

19 what the exhibits were. Then I'm done, then

20 it's all up to the agricultural marketing

21 service to take it from there. All right,

22 what else do we need to do? Ms. Schmaedick?

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1 MS. SCHMAEDICK: I believe that

2 covers our tasks for the day.

3 JUDGE CLIFTON: All right, very

4 fine, who will apologize to our hosts for our

5 tardy departure?

6 MR. HILL: I went out there and

7 did that before.

8 JUDGE CLIFTON: You're a good man,

9 thank you Mr. Hill. All right, this concludes

10 our record at 6:26.

11 (Whereupon, the hearing was

12 concluded at 6:26 p.m.)

13

14

15

16

17

18

19

20

21

22

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Aabbreviated 284:9abbreviation 44:4ability 142:2

221:18 234:16235:9,14,19274:14 277:11288:12

able 169:19 193:7200:12 208:7234:3 286:13307:5 318:18321:1 336:10395:8,12,14 396:8

above-captioned1:17

above-mentioned232:12

absent 300:11absolutely 235:7,8

316:15 330:16386:11

absorbed 326:19abundant 276:22accept 171:9

358:13acceptance 124:2

170:18,19,21171:1 192:1 201:8201:11,15,20202:3,7,10,13223:7 276:8279:19

accepted 6:1 296:9296:10

access 74:12110:20 270:2,10286:11

accessible 316:13accompanying 8:2accomplishments

293:19account 87:3

273:20accountability

264:6accountable 159:16

accounted 80:12,1486:5,9,13 87:888:1,5 100:14263:19

accounts 168:13227:6

accurate 200:4254:21,22 325:7

achievements293:19

acidity 299:5acknowledge

174:22acknowledged

174:19acquire 161:18

162:6 269:16acre 26:20 27:8,8

27:11,13,15,15,1827:20 28:1,4,553:8,11,16,18,2154:2,8,11,13,1554:19 55:2,559:19 79:7 92:2093:10,20 253:21

acreage 53:7,15,2054:8,12,18 55:255:13 59:18 72:1178:13,15 81:1982:21,21 83:1,7102:14,15 122:13123:19 253:19254:1,4,8,11305:6

acres 24:5,7,8,9,1024:13 25:10,13,1525:16,17,20,2126:5,7,8,9,1345:22 46:4 78:1278:15 79:10 82:382:4,16,17,19102:14,16,19114:20 115:4164:20 252:12,22258:14,16 259:6347:10 374:10,16

act 143:20 179:16

350:11 354:20355:2 364:15365:2

acting 74:1actions 379:2 389:9active 75:18 208:19

209:3 368:11actively 112:21

161:18 297:3activities 61:6

200:18 260:5270:11 326:16

activity 326:13327:14 364:14

ad 63:20 294:13adapt 288:4adapting 103:4,7add 41:16 42:13

144:10 146:3160:11 175:14181:13 206:7213:21 224:1244:1,13 246:5247:7 264:20272:18 279:13296:7 322:21338:1 368:7,9382:12 399:21

added 42:18 49:8,991:17,20 163:15163:16 222:3279:5

adding 94:12 96:10359:21

addition 15:2248:15 56:11 68:970:14 110:5 155:9184:7 200:16202:11 230:3256:15 271:11275:20 293:9332:1 376:2

additional 7:1574:19 96:11 167:3360:5 388:16

Additionally 62:13address 70:13

128:10 184:11348:1 354:12389:6,7 407:8

addressed 112:8127:16 179:20257:5 298:6 407:6

addressing 73:15adds 221:6 400:12adequate 72:18adjust 256:12

257:7adjustment 222:10

222:15administer 22:17

157:16 257:14administering

154:15 221:16administers 59:11administration

22:10 79:4 80:4154:20 155:21169:1 197:13198:4 202:19380:2 382:7

Administration's191:11

administrative1:21 5:6 9:1713:17 15:10 58:858:18 59:10 61:861:17 72:17 126:2151:10 156:21157:1 163:7166:22 167:12171:2 187:19189:21 191:14193:5,11 199:14202:5,6 203:18225:20 236:16250:12 347:19381:4 387:12388:14 401:10

administratively167:2

admission 44:1449:21 58:3 144:14144:19 181:17

182:11,16 183:2184:14 217:22223:12,17 247:11264:14 373:2387:2 400:21

admit 278:4 386:22admitted 5:16 18:1

18:7,8 44:16 50:157:16 58:5 144:16144:21 182:15183:1 184:18218:4,5 222:22223:16,22 224:5247:15 264:18277:21 343:21,22344:3,4 373:4387:4 401:13,15

adopted 162:11advanced 298:15advances 295:18

295:20advantage 46:22adverse 357:15

359:20advertise 362:11advertisement

63:17advertising 168:19

173:20 176:9211:7 229:8235:19 364:2

advise 345:12,15ad-lib 161:4affect 114:9,14

328:2affiliated 195:7,14

196:16affirm 133:6afford 320:15

382:6affordable 74:11

110:19 270:2afforded 381:20

400:4affording 400:8Africa 129:9

276:19

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citrus-related59:14

claim 244:18clarification 97:21

104:10 121:2124:15 140:18165:16 183:10215:8 218:7258:10 259:10281:4 302:10303:2 323:18332:8 362:22393:9 395:5 398:8

clarified 98:22143:12

clarify 7:7 25:697:19 107:16108:19 119:6143:17 156:11

239:11 333:13382:15 400:15

clarifying 173:13class 177:7classification 238:1classifications

271:19classified 237:15

238:16 259:1310:4 330:13,20

clear 8:10 36:13158:10 286:11333:21 351:10395:3

clearly 289:20297:9 328:5

clementines 129:9clerical 379:8,16clerk 405:10,11,16

405:21 407:13,14click 403:18clients 69:14Clifton 1:21 5:3,6

11:11 12:4 13:213:10 14:9,2215:3,16 16:7,1317:2,11 18:5,1619:8,13,22 20:921:19 23:14,1724:11,16,20 25:330:17,21 31:2232:3,5 34:1535:20 36:21 37:237:5,12,19 38:1,538:20 39:4,1440:2,6 41:10,1541:20 42:4,11,1543:5 44:13,2145:5,10,13 47:747:11,15,20 48:448:10,13,19 49:549:15,20 50:2151:3,8,13 52:1,752:15 55:17,2256:2,19 57:1058:2,15 59:4 60:260:8,19 62:17,22

63:4 65:12,15,2266:2 67:10 69:277:13 81:4 82:682:12 83:14,17,2084:2,5,10,15,2285:2,5,7 87:5,1187:17 90:8,14,2291:10,13,21 92:793:15,22 94:397:2,9,15,18 98:298:20 99:12,16103:20 104:2121:6,10 124:14124:19 125:6,15128:14 130:10131:4,9,13,16132:19 133:19134:7 143:1,6144:2,13 145:21146:5,14,21 147:7147:13,17 148:2,6148:11,19 149:7149:14,18 150:4150:11,17 151:1156:9,16 157:12157:15,19 158:1,4158:8,20 159:6,10159:19 160:3,8,14160:17 161:21162:3 165:15,21166:5,9 175:13,16176:15,20 177:2,5177:8 178:4,10180:4,11,15,18181:6,10,16 182:4182:8,14,22 184:1184:6,10,17185:12,17 186:1,5186:13,18,21187:2,7,11,15,21188:3,7,13,17,22189:4,8,17 190:2190:5,9,16 203:1203:5 206:1,8,21207:10,15,18,20209:8 212:20213:19 214:8

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399:20 400:17401:6,11 402:3,8403:21 404:6405:6 406:10,14406:19 408:3,8

climate 111:16286:17

climatic 105:22Clonal 294:3close 56:9 108:1,8

304:10 323:22398:16,17

closed 115:20closely 72:20 78:3

250:13 267:8285:6

closer 128:7closest 18:18 289:8closing 257:9

381:10 382:3coach 130:10

158:22coast 305:11code 303:15 375:18

376:3,9coding 379:10coherent 145:20cold 89:7colleague 279:2colleagues 294:20

296:19collect 284:4 360:3

380:4collected 66:22

174:5 227:8228:11 311:21

collecting 397:19398:15,19

collection 67:20108:20 228:15303:13 335:7,15378:6 379:17380:9,11,14 390:7391:4 395:21

collects 72:1color 272:3 283:15

284:3 295:6

combat 90:1 94:7combats 257:6combination 57:8combinations

337:12combined 53:10,18

54:1,10,15,2155:4,10 347:21

combining 26:11201:10 223:7

come 6:8 14:1216:15 18:20 48:22115:4 126:7127:17 129:3137:11 145:18146:19 147:5179:22 185:10,18279:12 282:2317:10 323:21324:8,8 329:8363:16 382:19398:21 401:16

comes 131:9 137:5220:20 337:22

comfort 47:22comfortable 278:5

278:13 399:10coming 106:11

129:22 134:17142:15 162:14169:13 210:21297:2,5 300:20305:17 336:17399:4

comma 82:8 87:12comment 36:12

178:14 213:21233:17 289:21380:19,20

comments 184:13387:13 402:9

commerce 305:8305:22 349:1

commercial 30:1243:18 47:2 72:982:3,16,17 111:11122:4 125:21

128:4 138:11270:7 298:2 307:1317:17 318:21320:3,9

commercialization73:16 136:11286:20 298:2300:5

commercialize137:6

commercially122:6 125:19126:20 142:18280:4 296:22306:15,20

commission 64:4,664:8,9,21 65:574:10 152:17,18152:21 153:7,20175:3,20 176:13347:17 349:9356:15 357:1367:3,11 368:13372:1

commissioner64:12

commissioners108:5,6

commit 236:1committee 13:18

15:11 58:8,1859:11 61:8,1862:7 67:5,19,2172:17,19 76:17,2177:8 78:3 79:1681:15 108:7112:20 126:2128:9 151:11,11151:15 152:8,19154:6,21 155:2156:2 163:7 165:9165:16 167:3169:17 173:2175:5 177:16178:16 187:19189:21 191:14,16191:18,19 192:19

192:21 193:2,4,19193:22 194:3,8195:10,17 197:3,6197:8,11,18,21198:9 199:7,20,22200:3,11,12201:13 202:5,7,12203:17 204:16,17205:2 208:16,20209:4 210:10212:16 214:7215:16 219:7,22220:20 225:21,21226:2 227:4,9228:12,18 229:14230:18,21 231:6231:11,14,17,22233:5,6,22 234:13235:9,18,22236:16,17 242:14243:3,6,7,15,20243:21,22 244:18250:8,12,13251:19,21 253:2,9253:15,18 254:22256:9,11,19 257:7259:22,22 260:3262:15 286:4294:3 306:16311:3 347:12,19347:20 349:18,22350:8 351:8 353:9353:10,12 354:9354:10,12,15356:7 357:17360:2 374:20375:4,14,15 376:7376:21 377:12,16377:18 378:3,7379:22 380:6,10380:15 381:17382:6,9 387:12,22388:14,17,19389:5,8 390:4391:20 392:11,12393:3 397:13401:10

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committee's 78:5153:5,9 200:15,17228:22 231:2232:10 349:22376:10 378:13,19

commodity 69:1,6common 127:3

272:21 331:11338:5 375:9

commonly 52:14270:18,19,20,22330:15 331:7337:13

communicate200:12 248:13396:8

communication8:15 168:3 197:14261:16 262:14375:5 381:2,16388:18

communications75:7 237:4 390:15

community 75:17306:4 326:9 327:2

companies 77:9152:1 288:3 326:9

company 248:15250:12 286:22287:22 288:13374:11,14

company-owned261:13

comparable 63:21compared 82:4,17

101:15 253:18comparison 101:14compete 111:18

288:16competing 61:2

309:18competition 276:5competitive 65:10

74:13 110:21,22

111:6,22 289:14294:9

competitiveness295:1

competitors 46:21129:3

complete 89:1170:20 202:1,10202:15 219:11232:6 255:7 381:7

completed 37:1837:20 219:13388:1,2 389:1,14

completely 100:21130:5,6

complex 304:2compliance 171:21

244:18 263:1,5,7263:14 356:15357:13,16,16375:5 376:11378:4,5,8,9,12,13378:17,21 379:20380:10 381:3,18381:22 388:19390:5,6,14 396:3396:7 398:5,11

compliant 172:10complicated 336:2

336:22comply 158:18

263:15 380:13component 251:12

385:18components 158:16composed 161:16composite 302:15composition

256:18 299:15comprehensive

261:19 340:5342:19 343:1

comprised 61:1876:19

computer 41:21290:2 304:1

concentration

326:21concentrations

326:20concept 125:20concern 106:20

114:10 179:9204:21

concerned 296:3389:21

concerning 23:474:20

concerns 205:6concluded 408:12concludes 121:4

202:21 366:11408:9

conditions 105:22120:7 129:13139:22 164:21297:15 319:3

conduct 5:7 167:14197:11 199:8

conducted 197:4conducting 69:21

168:1conducts 67:3 68:5

198:9 378:8conference 168:6

215:18 216:3conferences 293:22conferencing 69:19confidence 288:20confidential 181:2

187:18 188:11,21202:4 221:3

confidentiality46:18 179:7

conflict 176:2,13349:16

conflicting 75:21confused 156:14confusing 310:19conjunction 136:19connection 66:17conscious 400:2consecutive 62:3

166:19 192:12

193:3,8,10 204:7consequence

299:14 327:10,21consequently

167:13consider 127:19

154:6,12 231:17254:4 306:20404:9 406:7

consideration154:18 155:18363:22

considered 96:4128:2 152:1 156:1191:11 232:5259:5 285:19298:5 312:4,5349:19 365:16374:18 397:13,14

consign 365:1consigned 364:13

365:8,19 366:3,7consignment

364:15consist 54:17 252:4consistency 193:11

235:21 288:14consistent 73:9consists 407:18consolidate 274:20consolidation

81:11Consortium 294:6constitute 256:20constraints 213:13

213:13consumer 1:13

66:9,12 71:22109:3 111:7122:19 124:2171:16 273:9276:8 286:12288:16 298:11,17358:12,20,20,21387:15

consumers 96:19129:2 232:14

276:11,16 288:1299:16 359:7

consumer-friend289:13

consuming 289:10consumption 63:19

299:13 328:4contact 56:12

178:18 180:9181:3 197:18198:1 380:17381:1 389:5

contacting 172:5contacts 248:6contain 96:7contained 299:10container 62:15,21

211:11 352:8,12356:10,21 357:7361:9 363:3

containers 169:22170:3 352:8 356:4356:9,12,17,19358:18,19 359:4,9359:18 361:15362:13 363:19379:11

contains 390:22content 278:18

299:9CONTENTS 3:1context 304:22continue 192:9

211:1 234:4 236:3355:17 357:11381:17

continued 103:8256:15 275:22286:9

continues 94:6275:5 357:21

continuing 229:20266:11

continuity 193:20204:8,18

contract 7:12 8:11269:12 275:5

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299:21conversations

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77:21 104:21109:3

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cooperatives 81:13115:9,12,15,18,21115:22 116:1,2,5200:9 201:2226:15 240:2,3

coordinating 73:13coordination 315:3copied 40:14copies 7:15 17:3,7

17:9 20:1,4 43:251:9,22 186:3

283:11 405:12copy 5:22 7:3,11,11

7:13,13,17 16:816:19 17:13 42:2042:21,22 49:3,451:16 67:18219:12 284:5330:2 334:5353:11 354:11377:10,14 387:14390:18 405:12

Corey 2:6 11:14,16cornerstone 232:10

232:21corporation 73:4

74:1,6,7 110:16155:15 161:15269:9,11 286:2312:18 315:1316:11 347:16

corporations 285:8correct 17:4 20:5,6

21:5,11,12 24:1932:4 36:15,1637:11,22 38:439:2,10 40:13,1741:12,13 46:856:22 60:12,1463:1 90:5 98:18123:15 143:21157:11 165:19171:9 180:17181:22 208:11214:19,20 218:9218:16 220:19221:19,21 233:19233:20 238:19239:14 258:14,17258:22 262:8265:21 283:16311:5 313:11331:13 332:9333:18 334:10,16334:18 337:7341:20 367:19,21368:2,4 372:11395:21 402:12,14

402:16 405:18407:3

corrected 204:1238:4

correction 44:22331:9

corrections 296:16402:18 403:6404:10,12,19406:21 407:12,18

corrective 379:2correctly 235:13

323:22 363:8cost 30:6 91:2

92:19,21 93:2,5,793:8,12,13 94:3,594:7,13,16,1895:7,15 168:2199:8,16 200:9255:21 321:4359:22 360:10381:4 386:5390:14 399:3

costly 314:15costs 30:8 43:12,14

91:7 92:5,1693:10 95:9 96:11167:12 171:2199:14,21 200:11360:12 386:1

Counsel 10:6count 134:15counted 258:19counteract 129:22counties 81:21,22

250:22counting 304:16countries 89:17country 131:20

308:7 369:7counts 124:20county 72:12 76:10

250:10 254:6255:2,15,22 256:2347:11

couple 45:20 121:9128:19 173:14

216:2 237:11248:6 259:4 266:8366:22

coupled 95:3199:11

course 123:21394:20

courses 69:18 70:2court 7:2,18 51:17

188:18 269:7402:18 403:8407:6,7,15

cover 6:4 94:1695:8,15 198:18227:16,17 363:12380:1

covered 36:19144:7 263:18310:9 340:19,21

covering 191:22362:6

covers 408:2coveted 289:11Coward 340:13co-PI 294:8CPA 243:20crack 245:16cracks 366:4CRDF 65:21create 205:17

313:11 335:21336:11 337:12

created 73:2 75:22336:5

creating 336:13creature 132:7CREC 68:18,21

69:4,18 70:4,7,1491:6 92:4,15

credited 227:21CRFD 65:9,14criteria 164:12critical 299:7crop 23:8 24:9

25:10,14,16,2126:4,8,10,12,1927:10,12,17,22

28:13,16,21 29:129:2,8,9,13,15,1631:11 32:8,12,1333:2,9,12,15 34:834:11 35:5,8,1536:2,5 37:15 42:849:12 72:18 74:1685:22 86:2,395:14 96:9 100:13100:17 101:9,12101:16,16 102:1105:2,20 106:3,18106:20 138:15230:14 254:20255:9,11 274:8275:10 294:2

crops 28:9 71:972:2 95:21 110:5110:6,6 254:13302:20,20

cross 60:5 136:6139:4 182:1 183:4184:9 278:1 280:3

crossed 60:6 271:8271:9,12,14

crosses 336:15crossing 60:10

314:1crossover 181:1cultivar 316:1cultural 272:21

320:7 338:4 339:1culture 336:10cure 96:15current 88:7 105:9

151:9 156:12167:1 178:18193:1 196:20198:14 236:10253:17,22 274:21276:13 301:15310:9 322:1 330:4349:1 355:21357:5 360:1377:10

currently 102:1107:16,18 115:13

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curve 283:2 365:6customer 363:21customers 362:19C-h-a-d-w-e-l-l

13:16 51:2 59:8384:3

C-h-a-i-r-e-s 14:1C-h-r-i-s-t-i-a-n

11:19C-o-r-e-y 11:17

Dd 157:2 270:21

271:3 272:10333:22 334:1,9,13335:3 353:22355:6

daily 56:12Damn 162:4Dancy 122:2 272:5

287:1,7Dancy's 122:4dangerous 185:6

data 23:9,12 24:226:1,2,11 44:746:14,16 72:1,772:13,21 78:1083:11 84:13,1985:10 105:2 109:7136:14 178:21179:1 253:19273:16

date 156:4 289:18289:19 390:9405:15,18

dates 289:22 294:4352:2

David 333:22 334:1day 8:4 192:8

194:21 196:8216:12 233:16258:19 351:21367:18 394:10400:6,11 408:2

days 89:5,6 180:1266:8 351:20352:1 389:18,18390:8,10,12400:13 404:7405:19 406:6,12406:15,15,18,18407:14

DC 1:23 12:7 75:4deal 45:2 198:4

217:14 265:12dealer 376:5dealers 66:20,22

376:7 389:3dealing 306:21decade 164:15

230:7 253:8decades 75:15

232:22 399:2December 22:11,11

88:16 106:1 352:2decide 39:5 126:18

317:16 367:15,17397:17

decided 212:7decides 242:14

deciding 318:5decision 137:5

138:5 236:9 368:7decisions 9:2

297:21 300:6367:17

declared 350:11354:19 355:1

decline 96:6 128:21230:16 275:22328:3 399:5

declined 80:1 230:5275:15

declines 193:16,17253:5

declining 234:19234:19,19 246:15394:3

decrease 95:5105:12 199:13

decreased 25:11,1826:5,15 28:1729:3,10,19 83:286:15 126:6

deemed 300:16355:9 380:18

deeply 293:10defer 45:8 130:9

361:20 364:17define 304:1

348:16defined 28:9 30:12

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processes 130:14205:16 300:15

processing 64:2076:14 93:1 95:15114:10 212:1295:2

processors 69:2277:4 217:3

produce 46:1956:17 79:2 93:7,9111:17 113:4118:20 119:2,5120:13 124:4138:13,15 254:13255:6 276:16297:22 303:16306:5 307:17309:4 314:14,17320:8

produced 53:4 72:272:7,8 78:18 79:681:22 82:1 85:1285:16 93:3 94:13111:19 116:20122:8 205:21251:9,10,11252:11,21 275:12275:20 276:17293:12 296:21310:7 313:19326:1 337:9

producer 62:3191:7 195:1,3,5318:5

producers 73:21,2277:21 114:22118:8 151:18194:4 270:1 274:6300:17 312:14314:17 316:5,13316:14 317:22

produces 76:13119:7 151:19299:2 308:2,5

producing 81:2191:7 92:5,16,2293:6 94:4,6 95:10102:1 114:16117:20 125:5129:13,20 142:13251:17 254:8285:13 307:18374:9 382:4

product 46:6,773:16 117:4 138:6255:21 256:21288:16 310:9370:12 372:7

production 28:6,828:8,11,12,17,2029:3,7,10,12,1734:4,6,7,9 35:1,435:7,10,14,16,1936:1,4,6 37:738:14,16,19 39:1839:20,22 40:1,7,840:11,15,16 41:141:5,7,8,18 42:2,842:10 47:2 49:1149:14 53:7,15,2054:8,12,19 55:255:13,20 59:18,1960:16 61:12 63:763:14 68:12 72:578:19 81:19 83:283:5,7 85:13,1791:3,7,8,19 92:5,692:16,17,19 93:13

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wanting 55:19165:7

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website 41:22 43:1

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we've 105:15 108:4110:12 112:3,10113:14 117:9,18121:21 122:7,21123:7 131:1 141:7142:15 144:7169:3 171:7 173:5174:19 175:3191:21 208:18221:2 234:20243:13 266:3267:15 313:19319:5 334:17344:13 368:10398:14

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willingness 201:17wind 140:21window 127:13

128:1 316:21317:17

winner 320:19Winter 1:14 5:4

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year's 115:3 168:17231:18,21

yeses 147:9yield 26:16,17,18

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146:12 169:4

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$$1.24 35:3$1.6 34:11,14,21,22$1.9 35:2$10.00 33:3$11.29 33:5$11.48 31:14$11.91 32:17$12.11 32:17$12.59 31:17$12.80 31:14$14.3 35:15$15.99 31:12$16.27 33:21$16.45 33:3$17.45 31:11$189 36:8 37:10$19.50 33:12$195 35:11$2,370 93:2$2,935 93:10,20$2.3 34:9$20.70 33:20$21.06 32:8$21.89 32:10$225 35:8$230,000 234:14$26.68 33:9$296 35:11$3,000,000 75:11$3.34 34:1$300 8:3$351 36:3$383 35:6$4 294:10$4.11 32:20$4.62 33:6$4.81 32:20$4.87 34:2$50 317:13

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$58 65:3$6.61 33:15$6.77 32:13$63.8 36:8$7,000,000 80:6$7.2 234:10,11$7.48 31:20 32:1$7.95 31:20 32:3$750,000 79:5

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11 4:9 16:3,4,11,14

18:8,11 45:2153:5,12 61:2164:11 74:21 79:783:9 161:11 194:3195:10 200:21201:2 209:14227:15 238:2252:9,15,19265:10 266:1271:20 272:5302:11 400:11402:1

1a 270:131b 271:161st 62:1 229:151(a) 256:7 258:31-A 53:13 79:7

83:101-5 150:121.6 34:131:00 146:20 147:5,81:15 147:9,15

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58:22 78:19,2282:9 84:7 85:1886:8 89:17 98:798:15 99:3 100:10102:10 116:11121:13 144:19,21145:11 193:14194:5 230:8234:14 246:1254:10 294:21305:20

10th 104:22 105:10195:15

10,800 25:2110-minute 248:110:00 48:210:05 48:510:11 52:810:57 91:14100 371:91031 1:22104/125/143 3:6107,800 25:1511 4:15 28:7 41:5

81:1,9 87:1,2190:9 91:16 102:6105:12 106:10148:4,10,12,14181:18 182:9,12182:15,19

11:15 97:6,611:22 97:10113 226:812 4:15 78:17 92:21

93:16 101:16119:22 148:20,22181:19 182:9,17183:1,7 255:8

12th 155:1712:19 145:712:22 147:1612:30 146:17120 216:1113 4:16 100:14

101:12 117:7

149:19,22 173:6181:20 183:3184:15,22

13.2 102:10 230:10130 293:1214 4:17 28:7 41:6

139:13 150:5,7173:6 181:20183:3 184:7,15,22

14th 89:1914.7 86:17 101:51400 1:23143 3:11145,200 25:15148/182 4:15148/183 4:15149/184 4:1615 4:17 29:21 45:21

81:21 116:7,11136:13 150:12,14173:6 181:20183:3 184:15,22303:10 322:13324:15

15.6 29:13150 389:18 394:9150/184 4:17150/194 4:17151 3:9152,161,167 3:12156.2 101:7159.5 102:6 105:1116 4:18 186:22

187:1,10,12190:13 214:1217:17 218:1,4,11349:18 368:11

16,200 102:1916/18 4:9,10160 3:12162 3:1317 4:18 86:5 89:16

187:16 190:13205:22 206:1,3217:18 218:1,5,11230:5

17th 156:2

170 372:17170.9 101:4171 83:3172 78:15173/340 3:9179.9 102:3 105:5

105:1118 4:19 29:21 61:18

117:7 188:6189:15,16 190:13218:5,8 220:3,11220:16 221:3222:21 223:13,16224:4

18/18 4:10,111860 374:7189 37:919 3:3 4:19 34:5

87:1,20 101:10190:3,13 220:10220:14,20,22221:6,19,20222:21 223:13,16224:4 289:19

190/190 4:181917 68:191919-1920 230:131922 285:91924 226:71935 64:71939 61:101948 75:11960 77:11985 292:7,12

293:21987-88 55:12

102:131997-98 55:12

102:141998 132:8

22 4:10 16:18,21

18:8,11 53:1964:11 79:7 83:10100:13 101:9107:11 117:5

143:11 163:1170:7 174:11194:22 196:10203:15 209:14227:17 252:10,20256:7 258:3,13271:21 272:6,14

2,000 374:162.4 29:82:03 186:62:07 189:92:42 224:192:57 238:1320 4:20 71:12 86:13

87:2,22 93:2107:19 116:7,10117:17 136:13153:14,15,19154:4 190:10,11190:13 223:18,22224:4 349:10356:14 369:19371:10

20th 194:21 196:8352:2,2

20.35 358:220.4 377:1200,000 127:122000 24:82000-01 23:8 25:10

25:14,16,21 26:426:10,12 28:16,2129:2,9,16

2001 22:222001-02 29:1,15

36:52002 82:18 101:142002-03 29:7 80:1

86:172002-2003 100:4,8

123:182003 101:152003-04 26:19

27:12 28:13 35:82004 23:2 95:22004-05 32:8,13

35:5

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2004-2005 95:12005 95:3 269:112005-2006 95:12006 22:9,10 294:62006-07 27:10

31:10 33:12,1534:10

2007 78:9,142007-08 27:172009 22:11,11

61:11 63:20 73:3152:11 163:14173:19 275:1

2010 89:19 113:142010-11 27:22

29:13 151:132011 78:16 92:20

101:15 255:82011-12 23:8 26:7

32:12 33:2,9 34:835:14 36:2 55:1260:18 65:1 79:980:2,8,11,21 82:182:2 86:18,2287:20 102:5,8,11102:18 155:7

2012 82:4,16 91:492:2,13 102:3155:17 156:2,20287:12

2012-13 102:2104:14

2013 1:10 5:5 102:5156:6 289:19,20

202 1:24,2420250-9203 1:23208 225:1921 4:21 75:8 80:9

81:2,10 100:16225:11,14 238:20247:12,15,18

211 27:20218/218 4:18218/224 4:19,1922 4:21 34:5 249:22

250:2 264:15,18264:22 289:20

22/44 4:1222/50 4:12220 374:10224/224 4:20225 3:14225/247 4:21226.15 100:1123 4:22 29:19 36:18

37:3,13 41:1149:10 65:5 80:13268:1,7,18 277:20278:4,8,10,18282:3,12,14,17

233 3:1524 1:10 4:22 5:5

25:11 284:9,13302:4 343:19,21343:22 344:6

24.7 86:16 100:10241 3:15242 3:16 4:1 28:1425 4:23 80:3,18,21

128:5 135:8 136:5139:15 151:17291:19,21 302:5305:3 344:2,3,4,7347:10

25,000 304:425,500 26:925-30 318:16250 3:18 83:3250,850,000 100:9250/265 4:21258 3:1826 4:23 128:5

346:19,21 373:3,3373:12

26,000 304:1526,300 102:14260 3:19265 28:4265,810 82:19268/278 4:22269 3:2127 4:24 28:18

101:18 373:7,15387:2,4,7

274 79:10 114:19279 3:2128 25:11 82:20

400:21 401:14,1928th 156:628-32 4:25284/344 4:22285 3:222851 250:6288 27:1729 81:20 270:11

275:15 400:22401:14

291/344 4:23295 28:13298 28:4

33 4:10 18:3,8,11

24:6 41:3,3 42:654:3 79:7 83:1085:22 108:9,12164:8 209:15233:22 249:21251:19 252:11,21256:8 258:2,3259:12 260:22272:1,7 323:19

3rd 1:133:15 248:23:16 248:53:38 267:1630 88:5 135:4 136:5

292:15 317:14322:7 390:8,10400:6 401:1,3,3401:14 404:7406:15,18

30,000 304:4,1330-40 121:21302 4:231 394:5 401:2,7,1431st 62:2 229:1632 26:14 83:2

101:17 401:8,8,14401:19 402:2

322 28:1

325 27:732746 269:733 82:18338 27:833881 1:1434 28:18346/373 4:23347 4:435 102:20361 4:4363 28:1366 4:537 86:7373 4:6373/387 4:2438 87:8 88:1382 26:19384 4:739 86:1398 27:14

44 4:11 17:21 18:3,8

18:11 41:3 54:1679:8 83:10 166:16185:11,13 190:22192:5 209:11213:5 252:13,22256:8 258:3 272:7325:16

40 86:16 101:17135:4 147:8191:10 193:17205:21 390:12

40's 135:1040-acre 308:5400,000 127:13401/401 4:2541 230:6412 27:1542 275:16428 26:1943 82:2244 80:2 81:16

123:10,1845 3:4 29:10 147:5

275:17 405:19

406:6,12,14,18407:14

45,900 102:15457 269:646 82:2146.7 29:1463 27:1149 25:18497 27:12

55 4:12 7:20 21:22

22:3 44:10,15,1544:17 55:6,8102:4 105:5109:21 167:10185:11,13 190:22194:2 209:11213:5 256:8 258:4272:8

5:00 344:105:12 346:45:13 346:15:30 248:115:56 383:1450 87:2,12,22

101:20 135:4193:16 254:11274:7

50's 135:1050,000 126:7 128:3500 1:13 79:151 80:1252,600 26:852/52 4:1353 26:15 29:3 86:10

270:4531,493 82:3,1554 379:6540 347:355 147:1056 86:257/58 4:1358 25:185877 191:159 3:5 29:4 80:1

123:10,17

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59.8 28:2159/145 4:14,14

66 4:12 22:1,3 24:6

37:13 42:13,1844:22 49:8,10,2249:22 50:13 64:1080:21 89:18 90:11110:14 168:12209:15 224:14225:11 227:3242:10 246:21272:8

6th 178:156,061 78:96.6 29:156:00 248:10,146:22 405:76:26 408:10,1260 179:22 191:9

251:8 273:20389:18 400:13

600 79:1601 152:7,19,21,22

153:1,5,8,12,18175:5 349:22356:11 375:17

601.4 375:18601.56 376:2605,000 24:10,1862 26:5 87:9 88:263 65:2654,747 78:1167 81:20 89:14

77 4:13 26:17 52:17

52:17,21 102:7112:13 169:20174:11 209:15272:9

70 74:17 128:2720-4443 1:24720-9776 1:24723 59:9 387:1074 102:16 382:579 100:12

797,303 82:4,17

88 4:13 57:12,14,17

58:4,4,9 61:2098:1,4 114:1170:17 185:11,13190:22 201:7209:12 213:5272:9

8,000 75:58-E 143:16,218.8 234:980 26:22 27:1,2,3

38:8,10,10,1281:17 117:15369:16,18 371:9

803 285:381 101:8,12 274:2818,700 24:9,1482 29:18829 347:385 27:1,2 38:9,10

293:20 374:1285th 347:787 100:17 230:289 80:15

99 4:14 58:17,22

60:5 61:19 64:1082:9 84:7 90:1091:17 93:17 98:398:9,12,13 101:5107:7 114:18123:8,8 144:15,16145:11 171:13214:22 239:18240:17 261:9262:7

9th 61:119:00 1:18 5:29:12 13:119:23 23:1890 27:1 38:8 78:17

85:15 100:12116:19 255:5

90's 329:3,4

901.42 168:13904.4 270:14905 59:12 61:9,10

62:11 99:19143:22 152:9187:19 189:22191:15 202:6,7273:11 274:22288:11 301:2403:18

905.14 164:9251:20 253:14,17

905.2 166:17905.20 192:6905.22 192:18

194:2905.23 192:18905.28 170:18

201:11905.31 72:16905.4 161:11

270:14 272:15296:8

905.42 227:6 232:6905.5 161:11

271:16,17 342:21905.52 169:21

350:5 356:9905.53 67:6,15

108:14,19 109:1376:13

905.7 171:14212:14 348:9375:3,7

905.9 163:2 348:19364:12,21

91 3:6 101:793 191:894 81:2295 27:4 38:12 88:22

292:3 389:1297 3:798 92:22 117:3

255:11995 151:8

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NEAL R. GROSSCOURT REPORTERS AND TRANSCRIBERS

1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com

C E R T I F I C A T E

This is to certify that the foregoing transcript

In the matter of:

Before:

Date:

Place:

was duly recorded and accurately transcribed under

my direction; further, that said transcript is a

true and accurate record of the proceedings.

----------------------- Court Reporter

462

Oranges, Grapefruit, Tangerines, andTangelos (Citrus) Grown in Florida

USDA

04-24-13

Winter Haven, FL